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Shard Market Eye: The Only Way to Play the Perfect Storm

Shard Market Eye: The Only Way to Play the Perfect Storm

Keras Resources (LON:KRS)

The Only Way to Play the Perfect Storm

Keras Resources is an AIM-quoted resource development company with a diverse suite of assets in Australia and Africa. Given the iron ore sector downturn, Keras has stepped back from its African iron ore projects to focus on near-term gold production assets in Western Australia. Keras plans to commence gold production in Q2 2016, with a plan to build into a 30-40koz producer. This new strategy drives shareholder value by acquiring access to permitted projects with low capex and opex, and the potential for near-term cash flow.

Unique Strategy

Keras, previously known as Ferrex Plc, has secured three “Tribute”agreements in the Kalgoorlie region of Western Australia, one of the most prolific gold producing regions in the world. Tribute Mining involves the mining of resources owned by third parties, on existing mining leases, and sending the ore for toll treatment at a nearby process plant. The deals are typically structured as profit share or royalty agreements.

Near-term Cash Flow

The advantage of a tribute deal is that because mining takes place on existing leases, there is no onerous permitting process. Furthermore, mining is normally focused on orebodies forming remnant resources below existing open pits, or previously un-mined shallow deposits. The use of existing infrastructure and toll processing means that capital requirements to restart production are largely negligible, amounting to working capital only, allowing projects to be fast-tracked into production

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Shard Capital Partners LLP is authorised and regulated by the Financial Conduct Authority. Registered Partnership number OC360394. The information above is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities, or related financial instruments. It does not constitute a personal recommendation as defined by the Financial Conduct Authority ("FCA”) or take into account the particular investment objectives, financial situations or needs of individual investors. The information above is obtained from public information and sources considered reliable. This is a marketing communication document and has not been prepared in accordance with legal requirements designed to promote independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Although Shard Capital Partners LLP is publishing the research, it is not restricted from dealing in the stock. Please note risk warning section on our website with regards high risk AIM shares. If you are unsure of the suitability of share dealing specifically for you then you should contact an Independent Financial Adviser, authorised by the Financial Conduct Authority

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