Ten Bagger, Friday 15th August Broker Canaccord tips Jameson...

Ten Bagger, Friday 15th August

Broker Canaccord tips Jameson Resources share price to run from 15c to 50c

Leading stockbroker Canaccord says shares in emerging coking coal producer Jameson Resources are set to more than triple following the strong results of its just-completed pre-feasibility study.

Canaccord is recommending its clients buy Jameson shares, saying they are poised to soar from their current price of 15c to more than 50c on the back of the outstanding prospects for its Crown Mountain coking coal project in Canada.

Jameson’s pre-feasibility study showed that Crown Mountain is on track to enjoy outstanding economics, with an extremely high internal rate of return of up to 61 per cent and a payback period of just 2.7 years.

Jameson is now in the throes of advancing the permitting process and preparing for a bankable feasibility study. This will see it generate strong news flow as it counts down to production and cashflow in 2017.
“The results of the PFS are very pleasing,” Canaccord says in its latest research note on Jameson. “Our price target has increased to 53c.

“We expect the next six to nine months to be very active for Jameson as it rapidly moves towards first production in 2017.”

Canaccord says the key share price catalysts were:
- Environmental Assessment fast-tracked to compile permit application;
- Further work to the Southern Extension and resource size and assessing potential blending options;
- Utilisation of contract mining and leasing scenarios to develop an accurate cost estimate with the proposed strategy; and
- Potential synergies via neighbouring producers.

Crown Mountain is located in the Elk Valley of south-east British Columbia, the source of the majority of Canada’s hard coking coal exports, and home to five operating mines.

The pre-feasibility study estimated a base-case cost of US$100 FOB, meaning Crown Mountain would be profitable even in today’s difficult coal market. There would be outstanding upside potential as the market recovered, the study showed.

Crown Mountain is ideally situated between Teck’s Line Creek and Elkview operations, and displays similar geology and coal quality. With a relatively low strip ratio, Crown Mountain has several competitive advantages among the field of developing coking coal assets worldwide, including being located in an infrastructure-rich area of stable and politically favourable Canada.

“Existing infrastructure for mainline rail, power and supporting communities are all well-established given the close proximity of other major coal producers,” Canaccord says.

As well as fast-tracking the development process at Crown Mountain, Jameson has also started drilling at its second Canadian project, the Dunlevy metallurgical coal project, another component of the company’s promising portfolio of Canadian coal assets

http://resourcesrisingstars.com.au/infopage/5164

PS - Cannacord increased their price target from 42c to 47 back in July -it has not hit that target yet, so as always DYOR