Aeon Metals Limited (AML) Game-changing drilling result...

Aeon Metals Limited (AML) Game-changing drilling result Recommendation Buy (unchanged) Price $0.32 Valuation $0.43 (previously $0.34) Risk Speculative Analyst David Coates 612 8224 2887 Authorisation Peter Arden 613 9235 1833 GICS Sector Materials Expected Return Capital growth 34.4% Dividend yield 0.0% Total expected return 34.4% Company Data & Ratios Enterprise value $175.5m Market cap $151.5m Issued capital 473.4 Free float 66% Avg. daily val. (52wk) $87,442 12 month price range $0.13-$0.35 Price Performance BELL POTTER SECURITIES. Biggest step-out, best result AML released the final assays from its Phase II diamond drill program at its 100%- owned Walford Creek copper-cobalt-zinc project in north-west Queensland. This included hole WFDD270, which successfully intersected the PY3 unit 900m west of the current limit of the Vardy Resource, returning: 45m @ 2.21% Cu, 0.32% Co and 43g/t Ag from 185m; including 30m @ 2.99% Cu, 0.44% Co and 50g/t Ag from 188m. This hole was the largest step-out hole of the program and again a significant test of the geological model that is being used to target the PY3 unit. Again the model has proven robust, achieving the highest grade hole from the recent drill program for which we estimate a recovered copper equivalent grade of 4.8% Cueq over the 30m intersection. Combined with the high grades, this makes hole 270 the single most valuable hole of the program in terms of contained metal. Prospectivity further enhanced Apart from the excellent grades, hole 270 signals a material extension of the high grade PY3 unit to the West, in which direction it also remains open. This signals a strong contribution to the Resource update, to be released by early 1QCY18. Perhaps more importantly though, the continuity, improved thickness and grade and the robustness of the model all materially enhance the prospectivity of potential strike extensions along the Fish River Fault, stretching 22km across AML’s tenements. This is a hugely exciting focus for ongoing Resource growth in CY18. Investment thesis – Buy, (Speculative), valuation $0.43/sh We reiterate our view that AML has entered an exciting period of cost effective discovery and growth. The upgraded prospectivity causes us to increase our valuation to $0.43/sh, as we increase our exploration valuation from $100m to $150m. We retain our Buy (Speculative) recommendation.