Should be updated again because of Toyota deal. Calculated cost of capital (125M) will be much lower.
Kasbah Resources Achmmach Site Visit Ord Minnett (OML) has recently conducted a site visit to Kasbah Resources Limited’s (Kasbah) Achmmach Tin Project in Morocco. The site visit was hosted by Kasbah’s Managing Director Wayne Bramwell and entire senior management team including the full exploration department. Overall we were very impressed with the progress on site and with the Achmmach project. Key points from the site visit include: Based on recent drilling results we now expect the resource increase to exceed our previous estimate of up to 10 million tonnes and have revised our forecast to 10-11 million tonnes or an increase of between 40-60% over the current JORC resource of 7 million tonnes at 0.8% tin. In addition to the substantial increase in tonnage we now envisage that the resource grade will also improve to 0.9% tin due to recent results announced. Re-interpretation of the structures and controls on mineralisation has lead to Kasbah identifying an additional trend of mineralisation, which is parallel to the current resource. We were highly encouraged by the exploration advancement and now consider there to be significant potential for further mineralisation to be delineated at Achmmach. Furthermore, early stage exploration at the recently acquired Bou El Jaj tin prospect has highlighted the regional exploration potential and we consider Bou El Jaj to be a high priority exploration target for Kasbah in addition the further exploration at Achmmach. In summary we were surprised on the upside by the advancement of Achmmach and the identification of additional exploration targets. We remain very positive on the outlook for tin in general and Kasbah in particular. OML’s base case valuation of Kasbah has been revised on the back of our increased expectations for the impending resource increase due in March and the exploration potential both locally and regionally at Achmmach. Our base case is $0.32 per share (previously $0.30) with an upside valuation of $0.61 per share (previously $0.53). We maintain our Buy recommendation for Kasbah with a revised 12-month price target of $0.48 per share (previously $0.41).
KAS Price at posting:
31.5¢ Sentiment: LT Buy Disclosure: Held
