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Papillon Resources (PIR)

Analyst: Duncan Hughes, RFC Ambrian

Recommendation: Buy

Price target: $2.06

Thursday’s close: $1.73

Reason: Appointment of new managing director

Comments: Papillon Resources has announced the appointment of Mark Connelly as managing director and chief executive officer of the company, effective immediately. Connelly was previously chief operating officer of Endeavour Mining Corporation, following its merger with Adamus Resources, where he was managing director and CEO. Endeavour Mining operates three gold mines producing approximately 300,000oz per annum in Ghana, Mali and Burkina Faso, and has a fourth mine under construction in Cote d’Ivoire. With over 25 years experience in the mining industry, Mr Connelly held senior executive positions with Newmont Mining Corporation and Inmet Mining Corporation prior to joining Adamus Resources. He has extensive experience with the development, construction and operation of mining projects for a variety of commodities, including gold, base metals and other resources in West Africa, Australia, North America and Europe.
More excellent news from Papillon as it continues to grow the business. Connelly has an excellent track record, having brought the Nzema Project in Ghana through to production among other achievements, including working through the subsequent merger of ASX-listed Adamus Resources and TSX-listed Endeavour Mining. He adds to an already impressive management team that is now extremely well set to advance Fekola towards production. We continue to rate Papillon as a buy and have completed a sum-of-the-parts valuation to determine a fair price valuation of $2.06/share based on current information. We believe a sum-of-the-parts valuation does not do justice to the less tangible value of its excellent exploration potential and high-quality management.