RE: Canaccord Report Today - $2.60 Target!!!!INITIATING COVERAGE 2/9/06
Full Metal Minerals Ltd. (FMM : TSX-V : $1.45) - Speculative Buy -
Target:
$2.60
Graeme Currie
Comment: Initiating coverage on Full Metal Minerals
Full Metal Minerals (FMM : TSX-V) is a junior exploration company with exploration focus primarily in Alaska with several land holdings also in Nunavut. The company is under the stewardship of Michael Williams, President, and Rob McLeod, VP Exploration and was listed on the TSX-Venture Exchange in June 2004. Over the past 18 months Full Metal Minerals has focused on building its property portfolio and concurrently optioning out a number of these prospects in order to diversify risk and to increase the overall exploration leverage in the shorter term. The company's Alaska land package is extensive and includes the historic Lucky Shot gold property near Anchorage, the Ganes Creek gold project near McGrath, the Pebble South Project in southwestern Alaska, the Aleutian Islands/Alaska Peninsula exploration projects, and the Boulder Creek uranium project on the Seward Peninsula. Although it is still very early in the exploration phase, drilling results to date at Lucky Shot indicate that the company may have outlined an initial resource envelope with the potential to host over 600,000 tonnes or approximately 460,000 ounces of gold at an assumed grade
of 24.0 g/t Au. The high-grade nature of the zone, as seen in the results from Hole 12, implies significant resource growth potential within a relatively short timeline, and we believe that the project has the potential to host over 1.0 million ounces of higher-grade gold mineralization. For valuation we will use the potential resource of 1.0 million ounces at the Lucky Shot property and apply an in situ value of US$35.00 per ounce, a US$10 discount to our current US$45/oz average due to the earlier stage of exploration,
with a US dollar to Canadian dollar conversion of 0.85:1 which derives a value of C$1.50 per share (rounded). At the current market
capitalization of about $40.0 million we believe that no value is being credited for any other asset held by this junior outside of Lucky Shot. We rate Full Metal Minerals as a SPECULATIVE BUY with a target price of C$2.60.