AIC Mines Ltd IAUFF

Sydney Morning Herald article

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https://www.smh.com.au/business/intrepid-looking-set-to-make-it-to-the-big-time-20100620-ypa2.html
Intrepid looking set to make it to the big time
With an initial resource estimate for Tujuh Bukit imminent, analysts put a premium on share price.
SOME genuine excitement is building over the potential of ASX-listed Intrepid Mines (IAU) to make it to the big time on the strength of its 80 per cent-owned Tujuh Bukit copper/gold discovery in eastern Java.
Some analysts out there reckon that over the next couple of years there is a fair chance that Intrepid could prove up a 45 million-ounce gold equivalent resource (it gives the copper, silver and molybdenum an equivalent gold value).
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That world-class potential was recognised early on by Brazil's Vale when it secured an option over an interest in the major gold-copper sulphide system at Tujuh Bukit that sits beneath the oxide gold-silver cap, the latter already ranking as a 3.3 million-ounce gold equivalent find.
Vale did not proceed, prompting some to think that perhaps the Brazilians found that there was too much hype surrounding Tujuh Bukit. But the reality was that Vale was not in a position to proceed. The Brazilian government ordered the national champion of mining to divert some of its planned capital expenditure in overseas locations back in to Brazil in response to the global financial crisis.
The early-stage nature of Tujuh Bukit meant it did not make the cut. The good news in all that is that Intrepid has kept its full exposure to a discovery that has grown substantially in stature since the Brazilians left.
That will hit home in the coming months, with Intrepid expected to release an initial resource estimate for the gold-copper sulphide system. The porphyry system has already given a feel for its potential with hits like 108 metres grading 0.95 grams of gold a tonne and 0.9 per cent copper within a 627-metre hit of 0.45 g/tonne gold and 0.44 per cent copper.
Intrepid is well funded to continue to add to Tujuh Bukit's upside. It is pulling in an initial $15 million from the sale of its Paulsens gold mine in Western Australia, taking its cash balance to about $50 million.
There is still some work to be done on the permitting side of things. The oxide resource lies within what the Indonesians call "protection forest" because of land erosion issues.
Open-cut mining is banned in such areas, but there is a process under which the area can be rezoned as ''production forest'' and open-cut mining can proceed.
The local and provincial authorities support such a rezoning and the next step is to secure the OK of the national authorities. Make no mistake, we are not talking about Daintree-type forest here. Have a look at Intrepid's website and you'll see it's what we would call clapped-out buffalo country.
Still, the uncertainty is there. No such uncertainty with the fiscal regime. Unlike the Australian government with its hell-bent ways with the push for a resource rent tax, Indonesia can't afford to be scaring off foreign investment.
Corporate tax in Indonesia is 25 per cent, and royalties would be between 2 and 4 per cent. That's not all that dissimilar to the current Australian regime (30 per cent corporate tax moving to 28 per cent). But the Indonesian regime becomes super-attractive when compared with the killer 40 per cent resource rent tax proposed by the Rudd government.
RBS Morgans analyst Chris Brown has a valuation on Intrepid of 75¢ a share. That compares with its Friday's close of 52.5¢ a share. ''Our expectation is that this resource will grow over the next 12-24 months - as will our valuation,'' Brown said.
Geoff Muers at Shaw Stockbroking has a 12-month price target for the stock of $1.20 a share, which is more than double its current price.
''We anticipate a maiden porphyry resource in coming months, with the potential for 5 million ounces of gold and 1.5 million tonnes of copper, or close to 20 million ounces of gold equivalent - including the 3 million ounces of oxide resources already delineated,'' Muers said.