Dart Mining (ASX: DTM) has received a SPECULATIVE BUY recommendation and a 12-month price target of A$0.18, almost double its last traded share price, from Bell Potter Securities.
The Australian broker issued the recommendation following Dart’s 93% increase in the Unicorn Project’s resource to 203 million tonnes at 0.06% molybdenum equivalent.
The following is an extract from the report.
Unicorn resource upgrade exceeds the mark
Impressive 93% resource boost for Victorian moly project
Dart Mining NL (DTM) has delivered an impressive resource upgrade for its 100%- owned molybdenum-copper-silver porphyry project near Corryong in Victoria.
DTM has increased the JORC resource estimate for Unicorn to 203Mt at 0.06% MoEq (molybdenum equivalent) from 105Mt, previously.
At a cut off of 0.04% MoEq the total Mineral Resource contains 72,000t (159Mlb) of Mo, 98,000t (216 Mlb) of Cu and 19.4Moz of Ag in situ metal.
Importantly, the resource upgrade demonstrated improved confidence in the project and 102Mt is now in the measured category. The very low strip (almost nil) and higher grade, near surface component of the measured resource (54Mt at 0.08% MoEq) bode well for proposed mining in 2016.
We expect the Scoping Study in mid-October should outline attractive economics for development.
Scoping Study in October to outline robust economics
The Scoping Study for Unicorn may outline compelling economics, ahead of feasibility studies. DTM could be in the lowest-cost quartile of producers with low cash operating costs of ~US$4-$5.00/lb.
We note that this resource could support plans for a 20-year, 5Mtpa mine producing 25-30ktpa of metal-in-concentrate with the option to ramp up to 10Mtpa.
The near-surface measured component of the resource alone could support a 10 year mine life with resource upside at depth. The financing requirement is estimated in the order of $300m with short payback potential.
Investment view – Buy (Speculative), Target Price $0.18/sh
We view the Unicorn project as one of the best molybdenum-focused developments in Australia. DTM is backed by an impressive management team.
The upgraded JORC resource estimate has provided a better sense of scale of the Unicorn deposit and is a significant step forward on the path to production.
We recommend Buy (Speculative) with a target price of $0.18/sh. We will review this target after the release of the Scoping Study in October, which should outline attractive economics for development. DTM had estimated cash of $2.5m at the end of August.
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