Getting Real at Buritica
Some recent analytics from Daniel Earle:
There is significant upside relative to Daniel Earle's estimates for the PEA due in the next couple of weeks.
This comes at a convenient time, in his view, as CNL has underperformed during the recent correction in the sector without the support of an economic study to underpin its fundamental valuation.
The company released cross-cut and drifting results that positively surprised versus the resource, in Daniel Earle's view, suggesting greater potential for greater bulk mining and increasing head grade.
Daniel Earle believe these results were supported by his observation of a number of minor vein/veinlet orientations and zones of brecciation that are not captured in the current resource model around the primary veins, which account for 70% of resources – other areas were less impressive.
The company expects to finish the year with US$65mm of cash and for spending to decline dramatically next year, with major pre-construction expenditures essentially complete – next year it expects to update its resources and possibly its PEA in Q2/15E and complete permitting Q3/15E.
Daniel Earle calculates that Continental is currently trading at 0.27x his corporate NAV5% and he maintains the SPECULATIVE BUY recommendation and $6.00 target price.
Good luck to all!
