peelwood gold.

Sultan Corporation, GB Energy and Tasmania Mines top the Proactive Investors Rippers today
Tuesday, March 01, 2011 by John Phillips

"The ASX managed to stay open for the entire trading day today, a better result than yesterday's kerfuffle when the exchange closed over an hour early due to a 'technical issue.'
The broad index brushed the positive equity leads aside and increased a mere 3 points to 4926.
On the markets, The Proactive Investors Ripper award was Sultan Corporation (ASX: SSC) with a 36% price spike, on no new price sensitive news, but this may be a late reaction by investors to the elevated gold results from Elsieonora reported last week....."

In my opinion, very few have actually understood the significance of the Au announcement from Peelwood.

This is a quick recap for the newbies:

On the 21st Feb the Co issued an ann titled: Elevated Sampling Results From Elsieonora.

It stated:

"....The Elsionora prospect occurs near the boundary between the two EL's and the geological setting is very similar to the McPhillamy's deposit located 50 km to the North of Sultan's tenements.
The Mc Phillamy's deposit is a JV project between Newmont and Alkane Resources Ltd, operated by Newmont. It has a stated resource of 3 million ounces of Au.
Newmont continues to actively explore in the vicinity of Sultan's tenements and currently holds EL 7451, a large area of Silurian volcanic to the South East of Sultan's leases".

The sampling programme has returned some significantly elevated Au results over a total strike length of 10 km with several individual zones of highly elevated Au values over a strike length up to 2km long.

The Co is now preparing a drilling programme to confirm and quantify those results.

Why is this announcement so significant?

If the drilling can prove up the Au results Newmont (worlds largest Au producer) will be silly not to buy our Elsienora Project.
This would tie in very nicely with their already stated 3 million ounce resource.

Benefit to Sultan:
More then enough cash to fully fund the Peelwood North and Montenegro projects without any further CR and dilution.

On top of that Peelwood North should produce an income of $7M pa.
As advised by the Co, Montenegro is 20 times larger then Peelwood North so we could expect around $140M income from the Monty project. Economies of scale will also play a major role.

Total income $150M+ pa debt free or about 13.5c per share.
Each share then should be worth a multiple of 13.5c so maybe 30c - 40c.

Timing:
April drilling, May results, so possibly June- Newmont knocking on our door.

Peelwood North possibly operational this year and Monty say 2 years to start production.

With the massive volume that we have achieved today, it looks like Instos were buying.
Let's say they were buying in at 3-3.5c so say in 2 years time when the SP is say 30c -40c they can make a 1,000% profit.

Not a bad investment.

That's not factoring in the "other project" that so many on this forum allude to.

As always this is only my personal opinion so please DYOR.