Aeon Metals Limited (AML) First assays from Walford Creek drill program Infill assays first cab off the rank AML has released the first assays from its 2018 drill program. The results are from the first two diamond holes, drilled in late April, and both drilled within the current Resource of 15.7Mt @ 1.24% Cu and 0.15% Co. Both holes successfully intersected the targeted PY3 mineralisation, with the following significant assays reported:
WFPD272: 14m @ 1.33% Cu, 0.19% Co, and 35gt Ag from 186m;
WFPD274: 13m @ 1.03% Cu, 0.08% Co, and 30gt Ag from 168m;
We also note, in hole WFPD274, a very high grade intersection of 2m @ 6.1% Cu from 81m; and
a shallow supergene zone of 10m @ 108g/t Ag from 17m.
Three rigs have now been on site since the end of April, with two effectively infilling and upgrading the current Resource. AML expects this drilling to deliver an increase in tonnes and grade. In addition, a third rig is testing the exploration potential of strike extensions to the west of the current Resource and it is this drilling that, according to visual logging, has intersected the PY3 zone 2.5km, 4.6km and 7.4km along the strike of the Fish River Fault.
Results consistent with Resource, results to flow from here These results are effectively from infill holes. We expect they will not only increase the confidence category of the existing Resource but, as drill hole targeting is optimised, also increase the grade and tonnage of the current Resource. The results themselves are very encouraging, in-line with the grades of the current Resource. Hole WFPD272 has returned particularly good copper and cobalt grades and hole WFPD274, while slightly lower grade in the PY3 has also intersected a very high grade 2m at 6.1% Cu, pointing to the fertility of the system. We anticipate that there will now be fairly consistent news flow following the release of these first assays and that the next round should include results from the wide step-out holes reported earlier this month. Overall, this is a very encouraging set of results.
Investment thesis – Buy, (Speculative), valuation $0.54/sh We reiterate our view that AML has entered an exciting period of cost effective discovery and growth and that there are well-founded expectations news flow from this program may deliver strong, positive catalysts for the share price. With the first assays now released we now expect a steady stream of newsflow over the next six months. We have an NPV-based valuation of $0.54/sh and AML remains one of our Top Picks for 2018.
Disclosure: Bell Potter Securities acted as Lead Manager to the $30.0m Placement in December 2017 and Manager to the $5.0m placement in August 2017 and received fees for that service.
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Recommendation:
Buy (Spec.)
Previous Close:
$0.395
Price Target:
$0.54
AML Price at posting:
39.0¢ Sentiment: Buy Disclosure: Held
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