More Than Just a Nearology Play

We have seen the response to the speeding ticket, so where to from here? That will all depend on RTR.

All indications point to the possibility that Earaheedy is a discovery of regional scale. If that is the case, then the 2 recent discoveries that come to mind of such significance are Hemi (DEG) and Julimar (CHN).

For want of better terminology, both DEG & CHN went “bat sh-t crazy” on the back of their discovery holes with market caps exceeding $1Bn shortly thereafter.

RTR has already appreciated about 80% on the back of Earaheedy and they haven’t reported anything tangible. However, should Monday reveal a discovery hole, I can easily see RTR achieving a doubling of MC to $200m (at least for starters). If that is the case, what should/could this be worth for CDT?

As I see things, CDT is more than just a standard nearology play. For starters, their landholding isn’t 5km, 10km, or 20km from RTR, but rather bordering RTR. In fact, partof the ground that was pegged/applied for by CDT was once owned by ZNC andsubsequently dropped prior to any regional success.

After having a dig through some WAMEX reports, as per report A50728, this tenure formed the wider Canning Gap project (yellow highlight in image - which also comprised the present day Earaheedy.

The report confirms the presence of Zn/Pb on CDT tenure. In the 90’s, RGC Exploration did some limited drilling. Hole TDH26 was located on the CDT tenure while TDH29 was located on the CDT border with RTR. Hole TDH26 contained best results (although low grade) of 0.4% Zn/Pb while TDH29 intersected 3 X 2m intervals at >1% Zn/Pb. The upper 2 intervals of TDH29 contained a lower grade envelope of lower grade mineralisation of 26m @ 0.5%. Interestingly thereport notes that the target horizon deepens significantly to the north/northeast – ground controlled by CDT.

This proves that there Is Zn/Pb on CDT tenure – this is not just anearology play. Is it economic? Did they assay for silver? Do we have better exploration tools and geological knowledge than 30 years ago? At least for the first 2 questions, I have no answer.

So let’s get down to brass tacks – what can the CDT price do assuming my assumption that Earaheedy is as significant as outlined above?

CDT has 732.5m shares and 15.5m 1.5c 06/23 expiry options. At Friday’s close of 1.5c, the MC was $11m. CDT should have about $2m in the kitty, meaning the company has an EV of $9m and doesn’t need to raise money in a hurry. MD, Stephen Stone, and Chairman, Michael Atkins hold about 10% of the company between them. They won’t be doing anything to jeopardise the potential impact of Earaheedy on CDT. CRC hold another 4%.

There are LT holders of CDT who believe that a $9m EV is justified(and probably cheap) based on their existing project portfolio prior to theEaraheedy peg. I’d probably agree with them. However, the math is pretty easy.At 3c/share, CDT is capped at ˜$22m (EV - $20m) (not fully diluted), at 5c ˜$36.6m (EV - $34.6m) (not fully diluted). Bynow I’m sure you all get the idea of the justifiable upside potential.

Come Monday, if RTR doubles in price to a $200m MC, at least in myopinion, a very justifiable case can be made for CDT trading between 3-5c. Ofcourse I’m talking my own book, but at least I’ve laid out the logic behind mythinking for you to agree with or shoot down.

I’ve put myself out there with my assumptions, but we don’t havelong to wait.