St George Mining (ASX:SGQ) has received a Speculative Buy from Perth based RM Research.
The following is an extract from the report.
Exploring for Nickel Sulphides in a Large but Underexplored Area
Large & Prospective Projects:
St George is exploring for nickel sulphides at its 100% owned East Laverton Project, as well as new acquisitions Hawaii and Mt Alexander North.
All projects are located in WA in areas considered to be highly prospective for nickel sulphide deposits.
The projects cover over 2,200km2 and contain ultramafic rocks similar to the nickel rich Agnew-Wiluna Belt, which hosts a number of world class nickel sulphide deposits.
Exploration to date has significantly refined a number of targets and has demonstrated the fertility of the company’s projects, with the right rock types, discovery of magmatic nickel sulphides and favourable geological setting.
New Projects Bolster Pipeline:
The acquisition of the two new projects from BHP’s Nickel West near the Agnew-Wiluna belt expands the Company’s project pipeline.
The two new prospective areas are a low risk value-add for an outlay of just $40,000, diversifying its projects into a known nickel rich region.
Exploration Starting Soon to Drive News:
The Company is due to commence a +7,000m drill program covering its Windsor, Desert Dragon and Hawaii projects, as well as a reconnaissance program at Lake Mingwal.
The drilling will be a combination of following up on previous intersections as well as testing new targets.
St George will also undertake follow up downhole and ground based electromagnetic surveys to refine targets for more follow up drilling. We expect regular updates on the drilling as well as on completion of the EM Survey processing.
Price Catalyst:
As with most junior exploration companies, we expect positive drill results to lead to significant share price appreciation, with the presence of nickel sulphide mineralisation demonstrating proof of concept.
Action & Recommendation:
We continue to view St George as a very competent explorer with a good technical team, and large prospective ground package in an underexplored terrain.
Since our previous report on St George last year, good exploration to date has demonstrated the quality of the ground, and with drilling starting soon, we expect any good drill results to be viewed favourably by the market.
RM Research continues to recommend St George Mining Limited as a Speculative Buy.
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