Ann: Broker Research Report , page-2

http://seekingalpha.com/instablog/485861-proactive-investor/1784681-stellar-resources-phillipcapital-bullish-on-heemskirk-tin

http://www.stellarresources.com.au/images/ASX_Announcements/2013/20130417-phillip-capital.pdf

http://www.proactiveinvestors.com.au/companies/news/42362/stellar-resources-phillipcapital-bullish-on-heemskirk-tin-42362.html

Extract
Three Key Points

- On 19 February, SRZ announced an increase in its Resource estimate for its Heemskirk project, to 71.kt of contained tin from 6.28Mt at 1.14%. This is the BEST tin grade of any project and the volume of contained tin is enough to get serious industry interest.

- On a comparative basis, SRZ is the cheapest tin equity exposure anywhere, at an EV of $48 per tonne of contained tin, compared with around $150/t for its peers.

- We calculate that the Heemskirk project has a value of over $160m. We assume that SRZ sells a 30% stake which finances their equity needs. This gives a valuation of 52c/share for SRZ, which we risk adjust to 37c.

Investment View

- We assume that SRZ is able to sell a 30% project stake for 90% of our valuation, which provides SRZ with the equity funding required to complete the project. However, we expect SRZ to raise some working capital soon.

- Our revised valuation is now 37c/share. We raise our recommendation to a Strong Buy.
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Good brokers note and good to see Stellar are keeping the eye on the ball on the marketing front.

I Wonder how the broker came to "assume" that the company would be selling thirty percent of the project?