Tuesday, April 20, 2010Mithril Resources an interesting...

Tuesday, April 20, 2010
Mithril Resources an interesting fundamental and technical play
by Martin Tscheuschler (Minc Trading) company news image

Technical analysis is certainly not the only criteria one should consider when buying a speculative stock but it can certainly help to improve your probability of success.

One company that appears to have both the fundamentals and technical?s on its side at this point is Mithril Resources (ASX: MTH).

Mithril is an exploration company with a number of projects in central and northern Australia.

These include the Huckitta Project where the Company has recently discovered a number of new nickel-copper mineral occurrences suggesting a large, fertile magmatic event occurred within the project with the potential to host a significant nickel-copper sulphide deposits. The new occurrences include Blackadder where rockchips returned 3.8% nickel, 9.6% copper and 1.7 g/t platinum+palladium.

Additionally, the Pardoo Nickel Project in Western Australia, host to the Highway Deposit, a 2004 JORC Code compliant inferred resource of 44.7Mt at 0.3%Ni, 0.1%Cu. Pardoo is well located in regards to infrastructure and Mithril sees considerable potential for new discoveries and scope to increase the size and tonnage of the existing Highway Resource.

From a fundamental perspective we like Mithril because it has a suite of underexplored assets in prospective regions of Australia.

The chart of this stock has an interesting pattern clearly indicating that it has a habit of bottoming out in March and early April and rallying into May and June in anticipation of positive drill results.

Although the company has yet to identify a major company making deposit; with ongoing work by one of the most experienced team of geologists in Australia on some of the least explored country in Australia, we suspect that it is only a matter of time before Mithril makes a significant strike which could transform the company.

With $6.1 million cash in the bank, a market cap of circa $20 million and an extensive drilling program about to commence on some of the least explored and most highly prospective ground in Australia, the company looks interesting from here.

The 2010 drilling program at their Basil project looks to be the most promising program undertaken by the company thus far. Should they deliver on this campaign, expect a solid re-rating in line with that seen in other exploration companies striking good drill results of late.