mr huntley is much happier

Today Huntley issued an update on CMR and it is very positive.

I cannot post the report but a few excerpts follow:

"Our Buy recommendation is retained. Demonstration of latent value in the sulphide project should be a key driver of the share price. We only apply a 50% weighting to our Sulphide valuation. Applying 100% would increase our CMR valuation from $6.50ps to $9.30ps. Successful first production from the start-up Oxide component in 1Q08 will add value, both in terms of the positive implications for the Sulphides, and the kudos for management. A consequent reduction in our discount rate from 15% to 10% would increase the valuation at 50% Sulphides to $8.40ps or at 100% Sulphides to $12.80ps."

"CMR still looks well and truly sin-binned, recently softening base metal prices and the backlog of drill assays at the lab do little to aid the share price. Regardless we gain increasing confidence that things are back on track after the announcement in August of the cost blow-out and commissioning delay. Initial grade control work to delineate ore boundaries positively reconciles with the geological model. Comfort can also be drawn from HNC meeting its full $72m capital contribution, despite joint ventures still not yet being formally signed. Formal execution requires NT stamp duty assessment, likely in around two months. HNC has approved and will fund the Suphide pre-feasibility and definitive feasibility study to the end of 2008. The company will also second technical staff to the Sulphide feasibility study, a potential positive in the stretched mining environment.

Exploration backlog


CMR says it has over 8,000 samples from this year's drilling stuck at overstretched labs and awaiting analysis. Four rigs drilled 136 holes in the September quarter for a total 10,000m. Assays from only 38 holes were available for inclusion in the report. Results confirmed continuity of uranium mineralisation within the central part of the Mt Fitch deposit, wide intercepts of ore grade lead mineralisation at Browns Sulphide, extensions of Browns Sulphide with CMRs' deepest drill hole to date and high grade copper, cobalt/nickel and uranium mineralisation at Browns East."