eResearch starts Papuan Precious Metals at "speculative buy"

Independent research firm eResearch has initiated coverage on Papuan Precious Metals (CVE:PAU) with a "speculative buy" rating and $0.30 target price.

Papuan Precious Metals has interests in four copper-gold, gold, nickel and platinum group exploration projects in Papua New Guinea (PNG): Mt. Suckling, New Hanover, Earia River and Bewani Mountains. The country is already host to numerous copper and gold projects.

In a research note, eResearch analyst Yuri Belinsky said: "We expect that Papuan will be able to delineate mineralizations at the Mt. Suckling and New Hanover projects in 2012-2013, and that one, or both, projects will obtain a resource estimate by 2014.
"The most compelling part of Papuan’s story is its drill program: drilling is conducted on its projects located in areas that have received little exploration activity in the past, but which exhibit the same geology as that of Papua New Guinea’s existing prolific gold and copper belts.

"Success in delineation of mineralization would inevitably lead to a higher corporate valuation."

Papuan is strategically located in Papua New Guinea, whose geology provides plentiful gold and copper deposits. The country's Central Range and Lihir-Tabar alkaline volcanic belts are hosts to numerous giant gold-copper porphyries and gold deposits.

The company is exploring parts of the Central Range and Lihir-Tabar alkaline volcanic belts which exhibit similar geology to those of the prolific parts, but where exploration has been limited.

Papuan expects to delineate and define world-class deposits and is currently drilling several targets.

Indeed, earlier this month Papuan unveiled partial results from the uppermost 79 metres of the discovery hole at the Urua Creek prospect at Mt. Suckling.

Hole URD002 intersected 70.00 metres grading 0.10% copper from 8.00 to 78.00 metres, and returned 6.65 metres of 0.77% copper and 1.84 grams per tonne (g/t) gold from 208.85 to 215.5 metres, including 1.10 metres of  2.16 % Cu and  9.60 g/t gold.

The company said the hole "successfully" tested both gold and copper soil anomalies and long intervals of gold and copper trench values in trenches one and two on Line 10 of the Urua Creek grid.

The eResearch report also highlighted that Papuan's management has a successful track record in discovering and developing similar copper-gold and gold projects in PNG and that the company is well funded to continue active exploration.

The company’s cash position currently is around $4.2 million.