by: Tim Boreham From: The Australian May 20, 2014 12:00AM
Coppermoly (COY) 1.8c
COPPERMOLY chief executive Maurice Gannon describes the PNG junior’s current raising as a “slog”, although it has a decent yarn to tell about its Nakru copper prospect.
“It’s just a fantastic project,’’ Gannon says of the project on the island of West New Britain.
Coppermoly last week released the results of two core samples, with grades ranging from 0.79 per cent to 2.05 per cent copper at near surface. The greater Nakru has an inferred resource of 38 million tonnes at an average 0.61 per cent copper and 0.28 grams per tonne of gold.
Sadly, the results didn’t add much va-va-voom to the share price, ahead of tomorrow’s close of a $5.25m rights raising and placement.
Coppermoly is benefiting from $25m of exploration carried out by its 49 per cent partner Barrick, which has lost interest in both gold and PNG.
Coppermoly has entered a deal to buy Barrick’s stake for $5m, with $1m due in mid-2014 and $3m in mid-2018.
Gannon says Nakru would be amenable to a simple open-cut operation, based on the existing port of Kimbe.
Gannon says he’s surprised the extravagantly mineralised isle is yet to host a working mine, especially as Esso scoured the joint in the 1980s before focusing on hydrocarbons.
We rate Coppermoly an on-market spec buy: in theory, Nakru will be producing in 2017-18 as a copper deficit emerges.
Given the share price it’s hard to get excited about the 2c-a-share rights issue, even with attached one-for-three options thrown in.
COY Price at posting:
1.8¢ Sentiment: ST Buy Disclosure: Held
