White Cliff Minerals Ltd (ASX:WCN) has received a Speculative Buy and a $0.04 target from Perth broker Hartleys.
The following is an extract from the report.
Developing Bonanza Gold in the Kyrgyz Hills
White Cliff Minerals owns ~89% of its flagship gold-copper project in the Kyrgyz Republic.
The project contains the high-grade Aucu gold deposit, which the Company discovered in 2014, and is now in the drill-out exploration phase in preparation of a major resource upgrade in early CY17.
Aucu has multi-million ounce potential, with over four mineralised systems [Upper Gold Zone (UGZ), Lower Gold Zone (LGZ), South Gold Zone (SGZ), and Camp Gold Zone] identified over a +3km strike length.
The epithermal gold system is exposed at surface and remains open along strike and at depth. White Cliff has a small current JORC resource over 300m of strike, of 1.15Mt @ 4.2g/t Au for 156Koz, which will expand significantly from the drilling now underway (~8,000m RC and diamond program).
The Company’s Exploration Target on the Upper Gold Zone East (UGZE) alone is for 1-2Mt grading 15-30g/t Au for 0.5-1.2Moz potential, which is estimated over ~500m of mineralised strike, with mineralised lode widths ranging from 1 to 4m.
We re-initiate coverage of White Cliff Minerals with a Speculative Buy recommendation and 12-month price target of 4cps.
The Company has current estimated cash of ~A$1.8m, which is sufficient to fund near-term exploration. With drilling now underway, strong news flow is anticipated.
White Cliff is leveraged to exploration success, with strong share price appreciation correlating well to positive drill results, which are anticipated.
Kyrgyz Republic - improving investment destination
Kyrgyz Republic is becoming a more favourable mining destination. The democratic Central Asian country has an improved mining code, full security over tenure (licence renewed and extended until 2020) and has an attractive tax regime in place.
Foreign investment is being encouraged with three new gold mining operations opened in the last couple of years; mining activities continue to be on the rise.
White Cliff has been working in country for over 6 years and has established strong local and central government relationships.
Aucu Gold could provide a quick pathway to early production
Aucu is largely a sedimentary hosted gold deposit with highly favourable metallurgical properties.
Metallurgical test-work to date provides excellent gold recoveries (free-milling ores) with very high gravity gold recoveries (+85%) and total overall recoveries +95% (very high gold liberation).
The altered sandstone host rock is only of moderate hardness, which we anticipate could provide low mining (reduced drill and blast) and processing (low energy requirement due to ease of crushing) costs.
With mineralisation at surface at very high-grades could also equate to low capital costs, as even a small scale operation could provide significant production ounces.
WA gold, nickel and lithium prospects being progressed
White Cliff’s Australian portfolio spans prospective greenstone belts within WA, containing gold and nickel prospects.
White Cliff’s 100%-owned Ironstone gold prospect near Laverton, also holds strong upside, with mineralised quartz veins (grading over 5g/t Au) within a shear zone identified, which remains untested over a ~500m strike length.
Assays are pending from recently completed soil geochem samples.
WCN recently entered into a JV with Liontown Resources (LTR), whereby LTR can earn up to a 70% interest in the Lake Percy Project through sole funding lithium exploration.
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