fat prophets

To restore the position and allow Prosperity to return to exploring the Kuini tenement, it has had to work patiently with the local authorities and community. In September 2011, the company announced it was returning to exploration on the tenement and has wasted little time in getting restarted.
To support the drill programme now underway, the company carried out trenching activities across the skarn outcropping on the Kuini tenement and also mapping of the site. The following is a photograph of the tenement workings showing the location of trench KU-01.


The better of the result from trench Ku-01 was 22 metres showing 2.04g/t gold and 0.26% copper with a sweet spot of 14 metres showing 2.77g/t gold. The better results from trench KU-02 were eight metres showing 1.21g/t gold and ten metres showing1.3g/t gold. The results from both trenches are encouraging, given the grades and seams have been found at the surface.
When the company last drilled at Kuini back in mid 2010, the two holes in that programme both intersected gold. The better intersection was 50 metres showing 0.57 grams per tonne (g/t) gold and 0.3% copper from 179 metres deep including a sweet spot of 17 metres showing 1.27g/t gold and 0.7% copper (PNDG017). This particular hole finished in mineralisation. The following figure shows an aerial geochemical image of the Kuini tenement with drill locations.

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With the results from the trenching, mapping and previous drilling, the company has proceeded to immediately drill at Kuini with two holes currently underway and a third (PNGD022) yet to commence. The 1,500 metre drill programme is targeting magnetic high signatures identified on the tenement and will follow up on the results from hole PNDG017. Assay results from the two holes drilled in the current programme are expected to be reported during this quarter.
We do consider the prospects for the company have certainly improved with its return to exploration in its southern Aceh tenement. We look forwarded to receiving further updates on the activities the company is now carrying out, at a rapid pace, at Kuini.

The bearish moving average cross in place since February is suggestive of momentum to favour the downside. The recent low printed was 2.1 cents. A sustained break above the 50 day moving average at 4.6 cents is indicative of short term momentum to have rotated back to the upside.
While Kuini has been the near-term focus of activities, the company continues to advance its Pelumat copper-gold project (Prosperity’s has a right to acquire a 73% interest). Aeromagnetic survey data has allowed the company to model the Pelumat deposit and direct the soil sampling activities over high magnetic signatures. The activities from the current field programme have been directed at identifying drill targets. The results from the field programme sampling will be available shortly. The company has commenced negotiations with landowners and the relevant authorities to gain access for drilling.
Exploration at Pelumat is in its infancy. We will however, monitor progress at the tenement with great interest.


With reference to the weekly chart, prices are testing structural support. Should prices firm at current levels, we would target a move towards the 39 week moving average of 6 cents over the medium term.
At 30 September 2011, the company had cash of A$902,000 and expected commitments in the current quarter of A$542,000. Although the company has sufficient cash to complete its current work schedule, there will be a need in the near-term fGor the company to raise new capital.
TWe are of the opinion the company’s reactivated activities at Kuini adds a further news flow stream as it seeks to makeup lost exploration time. Kuini has become the main focus of exploration. We do expect activities on the Panton Luas, Mutiara and Pelumat tenements will continue to be positive. With this in mind we continue to recommend Prosperity Resources as a speculative buy for Members who have no exposure to the stock.