coventry (cvy) - good summary/valuation....

Below is a good summary/valuation of COVENTRY RESOURCES LTD (CVY) - lots of upside...excellent ground floor opportunity to but IMO as it just relisted this morning.

Shares on Issue: 69.18m

Options on issue: 20.5m ($0.2030/4/2013)

Market capitalisation: $13.83m (at the $0.20 capital raising price)

Cash: $6m approx.

Summary

¡¤ Coventry holds an option to acquire up to a 100% interest in the Ardeen Gold Project in Ontario, Canada

¡¤ High©\grade Archaean vein gold deposits

¡¤ Historic production of 30,000oz gold

¡¤ Extensive underground development

¡¤ Numerous zones of high©\grade mineralisation open at depth & along strike

¡¤ Very high metallurgical recoveries (>97%) in initial test work

¡¤ Initial exploration target of 400,000©\500,000 oz of gold at 10©\15 g/t gold

¡¤ Excellent near©\term production potential

¡¤ Close to existing infrastructure & within 1.5 hours of the city of Thunder Bay


Key Transaction Terms

¡¤ Coventry has the right to earn up to a 100% interest in the Ardeen Gold Project from TSX©\V listed Pele Mountain Resources Inc. (Pele)

¡¤ Expenditure of C$1.5million within 18 months to earn 51%. Expenditure of a further C$1.5million within the next 24 months to earn 75%.

¡¤ Pele has the right to contribute to further expenditure on a pro©\rata basis, or Coventry completes a Bankable Feasibility Study to earn

100%. Pele would retain a 2% NSR royalty interest in this event.

History of Ardeen Area ¨C Thunder Bay, Ontario Canada

¡¤ 110 km west of Thunder Bay, Ontario (population 109,000) 100% interest in claims covering >5,000 hectares

¡¤ Highway within 15 km of project

¡¤ Extensive network of graded logging roads provides ready

access throughout the project High voltage power within 15km of the historic Ardeen Gold Mine

¡¤ Northern Ontario¡¯s first gold mine ¨C discovered in 1871

¡¤ Historic production of 29,948 oz gold at 6.48 g/t Au and 140,000 oz silver at 37.3 g/t Ag Shaft to 380m and 8 levels of development over strike of 850m

¡¤ Mineralisation remains open at depth and along strike

¡¤ Significant amount of ore remains unmined


Exploration History


¡¤ Little regional work done since 1970¡¯s

¡¤ Spasmodic drilling in and around the historic Ardeen mine up until 1990¡¯s

¡¤ Claim ownership was largely fragmented

¡¤ Pele Mountain consolidated tenure in mid 1990¡¯s

¡¤ Completed 12,000m drilling

¡¤ Identified numerous high grade zones

¡¤ Ceased work during DOT COM Boom with a large amount of core not analysed or assayed

Initial Target

¡¤ Based on non compliant work CVY has an initial EXPLORATION TARGET of 1.2mt @ 10 to 15 g/t for approx 400,000 to 500,000oz of Au.

¡¤ Initial work conducted have indicated the following characteristics of the ore;

o >97% recoveries

o Gravity approx 40% recovery

o Cyanide leaching recovers 95%

o Non refractory

o Amenable to conventional processing

¡¤ SIGNIFICANT exploration upside both on a project and regional basis

Key Milestones

¡¤ Recovery and analysis of previous diamond drill core. Results expected to start being released MID NOVEMBER

¡¤ 4,000m of DIAMOND DRILLING completed, results expected MID TO END OF NOVEMBER

¡¤ JORC RESOURCE released by EARLY 2010

VALUATION

Whilst Canadian gold companies enjoy a premium in valuation against their Australian counterparts, it would be reasonable to assume a valuation around $75/oz. This figure will change marketable based upon the grade and expected costs associated with each company¡¯s specific deposit. In general, the higher the grade, the higher the attributable value to per/oz.

On this basis it is reasonable to assign US$75/oz or A$80/0z

¡¤ Initial Exploration Target 400,000 to 500,000 oz @ A$80 = A$32 to $40m

¡¤ Exploration upside =?m

¡¤ Cash = $6m

¡¤ TOTAL A$38-$46m or ~ $0.54 to $0.65 with SIGNIFICANT exploration upside