High-impact drilling sees AusQuest rated a SPEC BUY by Perth broker
Perth-based AusQuest Limited (ASX: AQD) is a junior explorer with a diversified portfolio of base and precious metal projects across Australia, Peru and Burkina Faso. But it is the opportunity for near-term discovery success at two projects in particular – the Fraser Range region of WA and Peru’s coastal copper district – which has attracted the attention of Perth broking firm Hartleys Limited.
In a new research report, Hartleys Resources Analyst Mike Millikan rates AusQuest as a “speculative BUY” ahead of the imminent commencement of drilling at nickel-copper targets at the Dundas project in the Fraser Range belt.
“With multiple drill-ready targets expected to provide a strong flow of news and with the potential for discovery, we continue to recommend AusQuest as a Speculative Buy,” Hartleys concludes.
“An initial five diamond hole program for ~1,200m is proposed, with the rig scheduled to be onsite late November for drilling in early December,” Millikan says. “This high impact exploration program is a key near-term catalyst for the Company, which provides exposure to potentially significant upside and relatively modest downside given AQD’s current low market cap of ~$5m.
“With a current estimated cash position of ~$2.7m once T2 of the placement completes (subject to shareholder approval), and with more funds to come in from a SPP, which is underway, the Company remains funded for budgeted exploration programs for the rest of 2013 and 2014.”
Millikan notes that the targets to be tested at Dundas have been defined by a combination of electromagnetic (EM) surveys, both airborne and then ground-based follow-up and through soil geochemical sampling.
“The application of EM in the Fraser Range has been an important exploration technique employed by recent explorers and used successfully by Sirius Resources to identify the conductors responsible for both the Nova and Bollinger nickel-copper discoveries,” he says.
AusQuest has also built a quality portfolio of exploration opportunities in Peru, which is considered to be largely under-explored and prospective for large copper-gold systems (IOCG and porphyries).
Seven key prospects have been defined through follow-up work, three of which are 100%-owned by AQD. “The Company is now in the process of obtaining drill permits to test these drill-ready targets, with some of the work expected to be funded through the Peru JV with Cliffs Natural Resources,” says Hartleys.
“These targets have high prize potential due to their size and location (within the highly prospective southern coastal belt.”
AQD Price at posting:
2.8¢ Sentiment: LT Buy Disclosure: Held
