Sydney, Aug 11, 2016 AEST (ABN Newswire) - Carbine Resources (
ASX:CRB) has announced a significant resource upgrade at their Mount Morgan gold copper tailings re-treatment project in Queensland. This has seen the total resource grow by around 20% or 1.8Mt to 397,000oz Au (394,000oz Au indicated). The resource upgrade forms the basis for the Definitive Feasibility Study (DFS) which is due to be released during September 2016.
Given the significant by-product credit revenues (copper sulphate & pyrite), we believe that when production commences at Mount Morgan next year, the operation will be one of the lowest cost gold projects in Australia (LOM AISC - A$522 / oz - TSI estimate). At today's gold price the operating margin would be more than $1,200 / oz.
Analyst Comment: Since announcing key management changes earlier this year, Carbine has continued to work quietly behind the scenes, however are now on the verge of releasing the DFS for their Mount Morgan project next month. The recently announced resource upgrade, which will be central to the DFS, saw an improvement in terms of the size (extended mine life) as well as head grade, which should result in improved economic outputs for the DFS in comparison to the PFS.
Carbine also recently completed a heavily over-subscribed capital raising ($7m), which ensures the company has sufficient funds to complete the DFS, as well as introducing a number of prominent Australian financial institutions to strengthen Carbine's share register.
Valuation: We have increased our valuation for Carbine to $0.50 / share (previously $0.40 / share). The key driver for the change to our valuation was an extension to our mine life (10yrs) along with a slight change to our head grade assumption. Both assumptions are in-line with the resource upgrade.
However given the upside exploration target (40Mt at 0.97g/t - 1.2Moz) as well as the change in the market's appetite for gold equities since the release of the PFS, we also examined an increased throughput scenario (1.5Mtpa) which saw our valuation increase to $0.68 / share.
Further information regarding the key assumptions in our base case valuation as well as analysis on a number of different scenario can be viewed by clicking the full investment analysis.
This information should not be the only trigger for your investment decision. We strongly recommend you seek professional financial advice whenever making financial investment decisions.
To view the video, please visit:
http://www.abnnewswire.net/press/en/84433/CRB
This information is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Adam Kiley (AR No. 458224) is an authorised representative of Intelligent Financial Markets Pty Ltd (AFSL No. 426359).
About Carbine Resources Limited
Carbine Resources (ASX:CRB) is an Australian public company based in Perth, Western Australia. The strategic objective of the Company is the advancement of shareholder's interests through exploration and evaluation of its current projects and acquisition of additional projects on favourable terms.
About The Sophisticated Investor
The Sophisticated Investor is a new equity investment tool which seeks to assist investors in becoming more informed in their investment decision making. We show and tell investors about a company in a series of short, informative videos. We possess specialist equity analyst skills and are complemented by video professionals. We conduct site visits and interview management, in a way most investors simply aren’t able to access. We promote long term value creation for investors by employing detailed financial analysis and intrinsic value calculations.
Customer notice
Adam Kiley trading as The Sophisticated Investor ('TSI'), (AR No. 458224), is an authorised representative of Intelligent Financial Markets Pty Ltd (AFSL No. 426359). The information contained in this communication is intended as general advice only. Your personal objectives, financial situation and needs have not been taken into consideration. Accordingly, you should consider how appropriate the advice is (or is not) to your objectives, financial situation and needs before acting on the advice. The information in this communication should not be the only trigger for your investment decision. We strongly recommend you seek professional financial advice whenever making financial investment decisions.
Conflict of interest
TSI does and seeks to do business with companies featured in its articles and videos. As a result, investors should be aware that TSI may have a conflict of interest that could affect the objectivity of some articles or videos. Investors should consider TSI articles and videos as only a single factor in making any investment decision. The publishers also wish to disclose that they may hold stock in some companies featured in their articles and videos, and that any decision you make to purchase the stock of a company TSI profiles should be made only after you have initiated your own enquiries as to the validity of any information contained in those articles and videos.
Publisher's note
TSI will only initiate coverage of a company that passes our internal investment checklist. Once a company has passed this checklist, we will initiate coverage of that company and follow up with ongoing updates and commentary on its activities. Articles and videos produced and published by TSI are NOT Research Reports in terms of ASIC Regulatory Guide 79.
| ||
|
