Copper Strike has achieved a solid 67% share price gain for Members since our initial recommendation in Fat Mining 6 on 21st December 2005.
We had an encouraging meeting this week with Managing Director, Tom Eadie. The company appears firmly on track for completion of a full Bankable Feasibility Study on its Einasleigh and Kaiser Bill copper deposits in Queensland by the end of 2006. The economics of development remain robust and are being enhanced by strongly rising metal prices. Copper production could begin in late 2007.
----------------------------------------------------- "Copper Strike has shown an enthusiasm for production not commonly shared by many of its Queensland copper counterparts." -----------------------------------------------------
From a charting perspective, the break above the February high of 22.5 cents during the past two weeks reflects improving investor sentiment. Subsequent gains have seen the shares hit 25 cents, marking the highest level since last October.
CSE has rallied by more the 60% during the past six weeks and we believe higher levels are likely. The break above 22.5 cents has confirmed the upward trend with the next target at 28 cents. In time we believe that CSE has the potential to extend toward the all-time high of March 2005 at 40.5 cents.
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We attended a luncheon briefing in Sydney this week, where Managing Director Tom Eadie outlined development plans for both the Einasleigh and Kaiser Bill copper deposits.
The company has completed a broad-brush Scoping Study over the Einasleigh and Kaiser Bill deposits, the results of which show the deposits have excellent development potential.
The two deposits have an in-situ metal value of more than A$1 billion at current metal prices and the estimated Internal Rate of Return is well over 20%.
What continues to impress us about Tom Eadie, the company's Managing Director, is his eagerness to commercialise Copper Strike's Einasleigh project and generate cash flow as quickly as possible. This contrasts with some of its emerging Queensland copper peers, which have taken an eternity to develop their respective projects.
The economics of mining the Einasleigh and Kaiser Bill deposits appear robust and this development alone underwrites the current share price.
CSE Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
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