Western Desert (WDR.ASX, $0.80/sh, Mkt Cap $305M fully diluted) Emerging miner to take advantage of buoyant market.
•We expect Western Desert to soon conclude its debt financing, which will pave the way for completion of construction, and eventual production, the company targeting first shipment October 2013. With shipment only months away, we expect WDR to enter as a producer in a buoyant iron ore market, following China’s return to the market post resolution of its leadership, and the decline of Indian exports.
•Bulk sample mining has already commenced, as has the construction of the road and mine infrastructure. Most of the funds will be used to construct a haul road, which will connect the mine to the Bing Bong port, approx. 162km away. The beneficiated product has no impurities and WDR estimates fob costs of $60/t.
•We reiterate our Trading Buy on WDR and price target of $1.00, based on a discounted comparative EV/resource producer multiple.
