Hi, I have bought in today. See that gap's filled too. This is an article I found. The people that compiled it are usually pretty switched on.
6/3/2012 Morning Report\
Haranga Resources Ltd (HAR.ASX, $0.49/sh, Mkt Cap ~$100m) – Potential for near-term iron ore production leveraging existing and nearby infrastructure in Mongolia.
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Haranga Resources Ltd (HAR.ASX, $0.50/sh, Mkt Cap ~$100m) – Potential for near-term iron ore production leveraging existing and nearby infrastructure in Mongolia.
•Exploration to date at flagship Selenge Project highlights potential for near-term operation utilising existing infrastructure. HAR’s primary focus is on exploration for iron ore at the Company’s Selenge Project (HAR – 80%) in Mongolia, with drill results to date highlighting the potential for a near term operation utilising existing and nearby infrastructure (two rail spurs located within 30kms leading to the Trans Mongolian railway) and a ready market south of the border into China. The 2011 drilling program of >13,000m focused on 3 of the 4 identified magnetic anomalies at Selenge, with a maiden resource expected at the most advanced of these prospects, Bayantsogt, in coming weeks targeting around 40Mt at 30% Fe by our estimates, based on drilling conducted over about half of the anomaly. Drilling at the largest of the anomalies, Dund Bulag, recently intersected similar magnetite skarn mineralisation but in greater widths to that at Bayantsogt and has the potential to be the largest of the identified deposits at Selenge. An exploration target for Dund Bulag is expected to be released in the near term.
•Mongolian iron ore differentiated by mineralisation type and close proximity to China: Iron ore in Mongolia is most commonly seen as magnetite skarn mineralisation, which can generally be readily beneficiated into an iron ore concentrate product, sometimes using only a crushing, screening and dry-magnetic separation circuit. This is due to the coarse nature of the ore that liberates easily, thereby reducing the need to include a fine grind as generally required for massive magnetite deposits. Another competitive advantage for Mongolian iron ore producers is the close proximity to the northern provinces of China, which has a growing need for iron ore supply to steel mills to fill the gap as a result of declining quantities and grade from local production.
•Nearby Eruu Gol Project illustrates potential operation and value. Selenge is located within Mongolia’s premier iron ore region which is also host to the country’s largest existing iron ore mine, Eruu Gol, located ~15kms along strike from Selenge. Eruu Gol, currently producing 3mtpa and ramping up to 6mtpa, is expected to list on the Hong Kong Stock Exchange in 2013 with a target valuation of ~US$3b. China Investment Corporation invested US$700m for a 35% stake in Eruu Gol in 2009, implying a US$2b valuation at that point. Given the mineralisation at Selenge is similar to that being mined at Eruu Gol, together with the close proximity to the Trans Mongolian Railway, we would expect the likely economics of an operation at Selenge to be comparable to that of Eruu Gol. Our understanding is that Eruu Gol is currently delivering into the northern Chinese provinces for opex of ~US$50/t and receiving ~US$130/t, highlighting the attractive margins Mongolian iron ore operations can generate. Eruu Gol’s current resource inventory is ~300mt at 35% Fe.
•Proven management team. The board and senior management team of HAR have a proven track record of adding significant shareholder value via the acquisition and exploration of assets in Mongolia in association with Garrison Capital. This was best illustrated last year when Thai giant Banpu acquired Garrison’s Mongolian coal vehicle, Hunnu Coal (HUN.ASX), for almost $500m in cash at $1.80/sh. HUN listed in early 2010 at $0.20/sh. We also highlight that Non Executive Director Bat-Ochir Sukhbaatar is the representative of the vendor of the Selenge Project and also the Prime Minister’s brother, providing political capital to HAR.
•Catalysts in 2012. Metallurgy test work at Selenge is expected in Q2 2012 which will feed directly into a Scoping Study to be released by mid 2012. We expect this to examine the economics of an early stage operation of 1-2mtpa utilising nearby infrastructure, ramping up to 5mtpa dependent upon further resource growth
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