I noticed there is a new research report out for KIS...

I noticed there is a new research report out for KIS today:

http://www.breakawayresearch.com/research-portfolio/king-island-scheelite-limited-april-2014-report

NPV of ~$111 million for a company with $16m market cap looks quite good (to me).

Key Points (from report summary):

The King Island Scheelite Mine is a high grade historic tungsten producer, having produced in the order of 9.7Mt @ 0.64% WO3
- The Company is currently scoping a low capex staged open cut and underground operation over the historic operations, to produce approximately 36,000t of WO3 from a LOM mill feed of 400,000tpa, grading at an average of ~0.83% WO3
- The current proposal combines elements of two past fully permitted development plans - a proposed 2006 open cut and 2012 underground operation
- Development and environmental approvals are still in place – only minor changes will be required to permit the current option
- Our high level economic analysis indicates a robust project largely by virtue of the grade
- Indicative unfunded NPV8 project valuation (not discounted for project stage or risk) of ~$111 million, with an IRR of 35%
- Potential annual after tax free cash flows of $22-$29 million

King Island Scheelite is looking to fast track their King Island Scheelite project, with an aim to commence production possibly as soon as early 2016. This historical high grade producer still has significant open cut and underground resources, at grades significantly higher than ASX-listed peers.

The key to the King Island project is its grade – an average LOM feed grade of ~0.83% WO3 contributes to a potentially robust operation. There is also good exploration potential on the flanks of the mineralising intrusives.

The register is dominated by key stakeholders in the project (including the directors), and hence we see significant motivation to generate value in the Company, which will benefit all shareholders.

We see good value in King Island Scheelite, with our high level economic analysis indicating a robust project with a potential value well above current price levels. Key price drivers will include securing an offtake deal, and, down the track, successful project funding and then execution.

DYOR of course.