All primary approvals have been received from the NT government for the development of KGL Resources’ wholly-owned Jervois copper-gold-silver mine.
As a result, Morgans now adopts a valuation on an NPV basis at $0.619, with all the risks attendant to financing, constructing, commissioning and operating a resource project in a remote area with commodity price and exchange rate risk.
The pre-production capital cost was estimated at $200m. The resource of contains 462,200t of copper, 21.4Jmoz of silver and 175,700oz of gold.
Morgans slightly alters the rating to Speculative Buy from Add and increases the target to $0.619 from $0.377
Sector: Materials.
Target price is $0.62.Current Price is $0.42. Difference: $0.20 – (brackets indicate current price is over target). If KGL meets the Morgans target it will return approximately 32% (excluding dividends, fees and charges – negative figures indicate an expected loss).
