Thursday, 12 July 2012

Euro Pacific says Cayden's La Magnetita project "very compelling"

Capital markets firm Euro Pacific Capital said Cayden Resources (CVE:CYD) had a "very compelling" flagship project as it initiated coverage with a "Buy" recommendation.

Cayden Resources is a junior resource company with two key precious metals projects: Morelos Sur located in the Nukay mining district of central Guerrero State in southern Mexico and the Quartz Mountain silver-gold project in Nevada.

Morelos Sur lies approximately 230 kilometres south of Mexico City. It contains an 80,000 ounce NI 43-101 compliant gold resource and comprises four targets: Las Calles, La Magnetita, La Joya and Mina Verde.

"We believe Cayden has a very compelling flagship project, La Magnetita, attractively located in the Emerging Guerrero Gold Beltin Southern Mexico," Euro Pacific analyst Merrill McHenry said in a note.

The Guerrero Gold Belt is an emerging gold region in the southern State of Guerrero, Mexico, that extends roughly 60 km.

In early July, the explorer expanded the La Magnetita target area to over 7.3 square kilometres.

"We see La Magnetita as an exceptional exploration project, already producing attractive trench results, with strong regional geophysical gold project characteristics," Euro Pacific's McHenry said

"As it is still early days of exploration there is no current resource from which we can reasonably hypothesize a price target.

"Based upon our site visits, geophysical analysis, as well as early trench indications, we believe there is a pervasive case to own the shares exploration evolves."

La Magnetita is the largest undrilled geophysical anomaly of its type in the gold belt and appears to mirror the geophysics of the Los Filos Deposit.

"La Magnetita has a roughly three times larger magnetic signature than Goldcorp’s (NYSE:GG)(NYSE:G) Los Filos deposit. Based upon our site visits, geophysics, and recent trench results we believe La Magnetita demonstrates attractive lithologies regionally representative of economic gold discoveries. We believe trench results confirm our thesis."

Cayden's additional projects in Mexico include the recently-acquired previously producing, El Barqueno property which consists of a large network of over 30 mineralized veins mapped on surface over a 13.5 by 4.7 km strike.

Further details on Cayden Resources can be found at:

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