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Tuesday, 26 February 2013
Global Minerals Slovakia project has limited downside risk, says SmallCaps.us
Canadian mineral explorer Global Minerals (CVE:CTG) Tuesday landed an initial buy rating and a 55 cent target price from SmallCaps.us, which focuses on companies with a market cap below $100 million.
The 55 cent target price, the report notes, is 123% higher than Monday's 30-day average stock price.
Global Minerals is looking to advance the undeveloped Strieborná vein in Slovakia. It is in an old mine, adjacent to the previously mined Maria Vein.
The high-grade silver-copper vein type deposit is located in an historic mining district near the town of Roznava in eastern Slovakia. The former Mária mine site, which sits on land owned by Global Minerals, provides space for infrastructure and facilities that are necessary for ore processing and tailings disposal. Underground access is also available through the workings of the past producing Maria mine.
Because of the extensive existing infrastructure, the company expects the project could move into production in relatively short order and at a low cost.
"Strieborná has excellent infrastructure, including sufficient electrical power, railway access, paved highways and a work force experienced with underground operations," the research report says.
An April 2008 NI 43-101 technical report on Strieborná included 1.9 million tonnes in the measured and indicated category grading 231.7 g/t silver, 1.1% copper, and 0.7% antimony and 1.5 million tonnes in the inferred category grading 180.0 g/t silver, 0.9% copper and 0.7% antimony.
The company believes the Strieborná vein has enough resources for 8 to 10 plus years of mining, and it considers this little explored region to have "excellent prospect potential".
A current drill program aims to both expand and upgrade the current resource from the inferred
category to the measured and indicated categories. It also plans to define the upper limits of the deposit as well as the grade and continuity of the silver resource.
These drill results, ongoing engineering studies, along with the results of metallurgical testing, process flow-sheet design and concentrate marketing, will be included in a preliminary economic study - anticipated in the second half of this year.
"Due to a fund having to liquidate its position, Global’s stock significantly declined the past couple of weeks giving investors an excellent opportunity to get in at these low levels.
"We like the Strieborná project, as it’s already well advanced with limited downside risk. Underground drilling is ongoing, metallurgical studies are advancing and a new resource estimate and Preliminary Economic Assessment (PEA) are on the way," concludes the report.
The ultimate goal is for the company to enter production in late 2014 or early 2015, with Global Minerals now holding around $7 million in cash - enough to take it to the PEA stage.
Shares of Global were flat on Tuesday, trading at 19 cents on the TSX Venture Exchange.