RE: Canaccord raises buy recommendationThe analyst review
Metals and Mining -- Precious Metals and Minerals
DOUBLING THE DEPTH WITH A NEAR
SURFACE HIGH-GRADE KICKER
Investment recommendation
We maintain our SPECULATIVE BUY recommendation on the
shares of Batero Gold with a target price of C$7.50, up from
C$6.25 previously.
Investment highlights
• Batero released the results from a further five drill holes
completed at its 100%-owned Batero-Quinchia project in
Colombia.
• Hole 008 returned 592 metres grading 0.72 g/t gold and
0.13% copper. This hole effectively doubles the depth
extension of the porphyry mineralization to roughly 600
metres and it demonstrates the potential for a near surface
high-grade zone of mineralization at La Cumbre. Included in
the 592 metre intercept is a 178 metre interval of 1.0 g/t gold
and 0.15% copper (from 8-186 metres).
• Seven porphyry targets have been identified on the Batero-
Quinchia property: La Cumbre, La Lenguita, Matecana, Dos
Quebradas, San Luis, Mandeval and El Cedral. Results to date
have been returned solely from the La Cumbre zone. Initial
results from La Lenguita and Matecana are expected shortly.
Valuation
With recent drill results demonstrating the potential for a near
surface higher-grade zone of 0.8-1.0 g/t gold and 0.14-0.15%
copper, we have increased our in situ valuation to US$60/oz (up
from $50) to a potential resource of 8.0 million ounces of gold
equivalent for the Batero Quinchia project. After factoring in the
company’s financial assets, we estimate an NAVPS of C$7.48 per
share, which we round to our target price for Batero Gold.