Never heard of Molybdenum or Mo until l saw a doco on the Henderson mine in Colorado. Then l came across Dart Mining who appear to be up to their eyeballs in the stuff. Did some research, plenty of reading and liked what l saw. The following are two of the many reports circulating, they are courtesy of Proactive Investors from September & October 2012. They may be nothing new to the current DTM investors, but worth a read anyway.
October 26th, 2012 - Dart Mining (ASX: DTM) has received a fair share value bracket of A$0.17 to A$0.60 from a New York firm representing between almost double and over six times the last traded share price.
The company's exposure to porphyries with significant mineralisation potential and diverse commodities, specifically at the Unicorn molybdenum project, adequate funding, and expected lower operational expenditures, has prompted the valuation.
The following is an extract from the report.
Dart Mining NL (Dart Mining) is an Australia-based exploration company focusing on base metals and gold exploration in north east Victoria.
The company owns 100% beneficial interest in six tenements, which lie within the Lachlan Fold Belt (LFB). Geological studies in the area suggest the presence of molybdenum, copper, silver, zinc, tin and gold mineralisation associated with porphyry igneous intrusions.
Dart Mining’s principal project is the Unicorn prospect. The company announced its maiden drill results in October 2011, with a JORC Resource of 105MMT.
In April 2012, the company commenced a resource upgrade drilling program (RC and diamond) from surface to 250m, and announced the results in September 2012.
The updated JORC Resource of 203MMT at 596MoEq at a cutoff of 0.04% MoEq includes Measured resources of 102MMT at 664MoEq and Indicated resources of 35MMT at 576MoEq. This translates into M&I in situ metal resource of 50.35kt Mo, 75.39kt Cu and 14.9kt.
The drilling also defined a high grade zone of mineralization of 54MMT Measured Resources at 809MoEq from surface, suggesting potential for additional higher grade stacked Mo horizons similar to Henderson primary Mo porphyry mine in Colorado, USA.
In October 2012, the company announced completion of a scoping study for the Unicorn project. The scoping study evaluated three production rate scenarios and indicated an initial mine life of 14 years, with a potential to increase to 20 years.
Based on the initial mine life period, the project is expected to have a NPV of AU$255MM, generating a pre-tax IRR of 27% (at 10% discount rate and 100% equity basis) and a payback period of less than 2.5 years.
The study also suggested that the Unicorn prospect would be in the lowest cost quartile with a cash cost of AU$3.58/lb (net of credits).
The company expects production to begin in mid-2016. The addition of a further six years of production would add approximately AU$50-70MM in NPV to the project.
Dart Mining’s other projects, namely, Morgan, Mountain View, and Fairley’s are relatively underexplored, with a strong potential to identify additional mineralised porphyries within Dart Mining’s 2,000sqKm of tenements.
Dart Mining has adopted a unitary strategy of developing its prospects, with its current resources channeled principally into the Unicorn Prospect.
Arrowhead believes that Dart Mining benefits from porphyries with significant mineralization potential and diverse commodities, supported by a strong management team, adequate funding, channeled project execution, and expected lower operational expenditures.
These positives more than offset risks arising from regional concentration and adverse movements in commodity prices.
Given due diligence and valuation estimations based on a blend of Resource Based Valuation and Discounted Cash Flows, Arrowhead believes that Dart Mining’s fair share value lies between AU$0.17 to AU$0.60.
Valuation is based on the company’s flagship Unicorn project targeting Mo, Cu, and Ag, and does not factor in the potential value of the company’s other projects.
September 18, 2012 - Dart Mining (ASX: DTM) has received a SPECULATIVE BUY recommendation and a 12-month price target of A$0.18, almost double its last traded share price, from Bell Potter Securities.
The Australian broker issued the recommendation following Dart’s 93% increase in the Unicorn Project’s resource to 203 million tonnes at 0.06% molybdenum equivalent.
The following is an extract from the report.
Unicorn resource upgrade exceeds the mark
Impressive 93% resource boost for Victorian moly project
Dart Mining NL (DTM) has delivered an impressive resource upgrade for its 100%- owned molybdenum-copper-silver porphyry project near Corryong in Victoria.
DTM has increased the JORC resource estimate for Unicorn to 203Mt at 0.06% MoEq (molybdenum equivalent) from 105Mt, previously.
At a cut off of 0.04% MoEq the total Mineral Resource contains 72,000t (159Mlb) of Mo, 98,000t (216 Mlb) of Cu and 19.4Moz of Ag in situ metal.
Importantly, the resource upgrade demonstrated improved confidence in the project and 102Mt is now in the measured category. The very low strip (almost nil) and higher grade, near surface component of the measured resource (54Mt at 0.08% MoEq) bode well for proposed mining in 2016.
We expect the Scoping Study in mid-October should outline attractive economics for development.
Scoping Study in October to outline robust economics
The Scoping Study for Unicorn may outline compelling economics, ahead of feasibility studies. DTM could be in the lowest-cost quartile of producers with low cash operating costs of ~US$4-$5.00/lb.
We note that this resource could support plans for a 20-year, 5Mtpa mine producing 25-30ktpa of metal-in-concentrate with the option to ramp up to 10Mtpa.
The near-surface measured component of the resource alone could support a 10 year mine life with resource upside at depth. The financing requirement is estimated in the order of $300m with short payback potential.
We view the Unicorn project as one of the best molybdenum-focused developments in Australia. DTM is backed by an impressive management team.
The upgraded JORC resource estimate has provided a better sense of scale of the Unicorn deposit and is a significant step forward on the path to production.
We recommend Buy (Speculative) with a target price of $0.18/sh. We will review this target after the release of the Scoping Study in October, which should outline attractive economics for development. DTM had estimated cash of $2.5m at the end of August.
DTM Price at posting:
9.0¢ Sentiment: Buy Disclosure: Held
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