GREY:COLUF - Post by User
Comment by
chalkmarkson Jun 25, 2010 2:30pm
488 Views
Post# 17222568
RE: RE: Target $11.00
RE: RE: Target $11.00Canaccord's:
Event
Colossus reported additional exploration results from the Serra Pelada
project in Brazil.
Impact: Positive
The highlight hole was an infill hole from the Central Mineralized Zone
returning 50.85 metres grading 20.3 g/t gold, 3.4 g/t platinum and 4.9
g/t palladium. This is a solid infill result; however, what is more
significant is the discovery of two new mineralized zones discovered
150m NW and 50m west of the Central Mineralized zones. Hole SPGT-
001 returned 10.4 metres grading 28.40 g/t gold, 4.16 g/t platinum and
6.18 g/t palladium, 150m NW of the Central Mineralized zone. Hole
SPGT-002 returned 6.15 metres grading 34.93 g/t gold, 0.96 g/t
platinum and 3.05 g/t palladium, 50m west of the Central Mineralized
zone. While we had expected CSI to identify new mineralization on the
recently acquired land package surrounding the Serra Pelada project the
discovery of new zones of mineralization within the original land
package is an unexpected positive.
Valuation
While this is a positive development for CSI, we have already factored in
a value of US$100/oz on one million ounces of potential gold resources
to account for regional exploration upside potential. Our valuation and
target price remain unchanged. We continue to value the shares of CSI
based on a 1.0x multiple to our peak gold price NAVPS (7.5%,
US$1300/oz Au) of C$10.79. We maintain our SPECULATIVE BUY
recommendation on the shares of CSI with a target price of C$11.00 per
share.