MACPHERSONS REWARD GOLD LTD
RESEARCH NOTE
Gold miner with a silver lining
14th September 2011
12mth Rating
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MacPhersons Reward gold project: The company’s namesake
project has been the focus of activity since listing in late 2010. MRP
has concentrated on defining the extent of mineralisation within four
interconnected historic open pits as well as exploring some regional
targets. Drill results have demonstrated good continuity of
mineralisation culminating in the release of its maiden resource of
1.7Mt at 1.7g/t for 94.1koz of gold. The Tycho deposit is the most
advanced of the regional prospects and on the back of phase 1
drilling the company released a resource of 430kt at 1.5g/t for 21koz
of gold. The nearby Franks Find and Bakers Find prospects still
require drill testing but offer exciting potential for further resource
definition.
Nimbus silver-gold-zinc mine: The acquisition of the Nimbus mine
was initially done as a way to fast track gold production by utilising
and upgrading the existing silver mill to treat ore from the
MacPhersons gold project. However, with skyrocketing silver prices
MRP is exploring the potential of recommencing silver mining and
also investigating the economic prospectively of polymetallic
mineralisation within the landholding. The company has set an initial
exploration target of 6Moz silver based on historical drilling and
modelling work done by CSA Global. With drilling at Nimbus due to
begin in September and the plant to be commissioned by mid next
year the company is well advanced in the journey to becoming a
producer.
Due diligence on Boorara: MRP has entered into a binding HoA to
acquire the Boorara tenement package that envelopes the Nimbus
mine and mill. While the landholding comes with a modest JORC
resource of 84.6koz of gold, due diligence has identified a stockwork
of high grade veins 500m north of the current resource outline. The
geological setting is analogous to the Golden Ridge/Kanowna Belle
zone and while mostly prospective for gold it also offers potential for
extensions to polymetallic mineralisation similar to that seen at the
Nimbus mine.
Parallel milling setup: Since the acquisition of the Nimbus silver
mill MRP has made the decision to develop a parallel gold and silver
circuit on site. With refurbishment of the silver plant well underway,
MRP has also acquired key plant components for the gold circuit such
as an 800Mw ball mill, primary crusher and CIL leach tanks.
Commissioning of the plant is expected toward the end of FY2012
with start-up feed for the silver circuit being retreated tailings and
historic stockpiles and gold feed to be sourced from the MacPhersons
Gold project.
SPECULATIVE BUY
RIC: MRP.AX
Issued Capital
Price
Market Cap. (FD)
Net Debt/Equity
Cash
52wk High/Low
BBG: MRP. AU
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Phone:
Email:
194.05
0.295
63.8
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0.41/0.25
Tim McCormack
Analyst:
(+61 8) 9263 1647
tmccormack@psl.com.au
Disclosure: Patersons Securities acted as
Lead Manager to MRP’s IPO for $30m at
$0.30/sh in December 2010. Patersons
received fees for this service.
An investment in this company should be
considered speculative and note assumptions
employed are contingent on broader market
conditions remaining buoyant. These can
change at short notice. Recommendations
are current at the time of publication.
12 Month Share Price Performance
Share Price ($)
MacPhersons Reward Gold Ltd (MRP) is a Kalgoorlie-based
exploration company which listed on the ASX in December 2010.
Since listing, MRP has established a maiden gold resource at the
MacPhersons Reward gold project and has recently made a
number of game changing acquisitions. Purchase of the Nimbus
silver-gold-zinc mine and mill has added a new dimension to the
company’s production profile. Currently upgrading the mill to
allow for silver and gold production, MRP is set to become a
producer by the end of FY2012. Furthermore, MRP is carrying out
due diligence on the underexplored Boroora gold tenement which
envelopes the Nimbus landholding. We view MRP as a near term
production story with good exploration upside and therefore
recommend the stock as a SPEC BUY.
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RESEARCH NOTE – PATERSONS SECURITIES LIMITED
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
1
13 January 2009
Background
The company was established as a private entity in 2008 and entered into a series of
agreements to acquire the MacPhersons Gold project shortly thereafter. Operating under
the name Coolgardie Super Pit Pty Ltd and headed up by current MRP Managing Director Morrie Goodz, Chairman - Ashok Parekh and Non-executive Director - Jeff Williams the
company raised $2.9m to fund development and conduct due diligence on the project.
Later renamed as MacPhersons Reward Gold Ltd (MRP) the company listed on the ASX in
December 2010.
The company’s primary focus has been on extending and consolidating known gold
mineralisation within several previously mined open pits at the MacPhersons Reward gold
project near Coolgardie in Western Australia. More recently MRP has initiated two key
transactions which has 1) seen the company take possession of the Nimbus mine and mill
only 10kms from Kalgoorlie and 2) on the completion of positive due diligence will see the
company take ownership of the 33km2 Boorara tenement package which envelopes the
Nimbus project.
The Nimbus mill will become a production hub for both centres with the MRP planning to
expand the silver milling capacity and introduce a gold circuit allowing ore from both
centres to be treated at Nimbus. With the refurbishment underway and key gold circuit
components already purchased management indicate the plant should be commissioned by
the end of FY2012.
Figure 1: Location of the MacPhersons project relevant to the Nimbus mine and mill
Source: Company Reports
Capital Structure
MRP has 194.05m shares on issue (5.8m escrowed until December 2011 and 63.7m
escrowed until December 2012) and 22m options which are exercisable at $0.30 before 31
December 2013. The company is fully funded for exploration and on completion of the
Nimbus and Boorara acquisitions will have ~$21m in cash and no debt. Major shareholders
include Ashok Parekh (Chairman) and Ray Wright (Operations manager) who have a
15.53% and 15.13% respective interest.
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
2
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
Asset Overview
The MacPhersons Gold project and Nimbus/Boorara projects are located ~50kms apart. The
MacPhersons Reward Gold mine near Coolgardie has been the drilling focus since listing and
with a number of production strategies in the pipeline we expect to see developmental
guidance in the near term. The recently purchased Nimbus silver mine is 10kms from
Kalgoorlie and will be well complemented by the Boorara landholding should the company
choose to proceed with the purchase.
MacPhersons
The photo in Figure 2 shows the main prospect area at the MacPhersons Reward gold
project which consists of four interconnected open pits - Powell, MacPhersons, Salvo and
Kerry. The plan is to drill depth and strike extensions to unify the interconnected pits and
expand the resource. MRP has indicated a potential “big pit” option which is becoming
increasingly viable with appreciating gold prices and would greatly improve the economies
of scale of the project. The Tycho prospect is most advanced of the regional targets and
may serve as a start-up production centre. Figure 3 shows the location of the prospects and
we note that Franks Find and Bakers Find offer good resource potential with further drilling
required.
Figure 2: The 4 interconnected open pits at MacPhersons Reward (looking NE)
Source: Company Reports
Geology
Geology of the project area is bounded by the Burbanks Shear zone which lies 3kms to the
east. A felsic intrusion known as the MacPhersons Reward tonalite hosts the gold
mineralisation along the lowermost basalt-komatiite contact. The tonalite is 100m thick
within the immediate mine area and extends to the Bakers Find prospect for an overall
strike length of 2.4 km (Figure 3).
Gold mineralisation is predominantly contained within the tonalite in sheeted quartz veins.
Interpretations of drilling data indicate that mineralisation has occurred in two stages,
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
3
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
resulting in various widths of mineralisation and mineral assemblages. Early stage gold
grades tend to vary between 0.5g/t to 2g/t with progressive deformation events developing
quartz reefs within a biotite-chlorite stockwork envelope. These reefs vary in width from 0.2
to 2.0m and are well mineralised with gold grades ranging from 1g/t to 138.2g/t
Figure 3: The MacPhersons Reward gold project
Source: Company Reports
Big Pit Scenario
MRP is exploring a “big pit” mining scenario, whereby the 4 existing pits would be optimised
within the one pit shell. Exploration between and below the existing pits has returned
encouraging intercepts, although further drilling is required to increase confidence in the
resources for pit optimisation studies. The concept is well supported by the increasing gold
prices which improve the economics of the project.
MRP has had at least one drill rig concentrating on the in-pit drill out at the
MacPhersons/Powell open pits since listing. Historically there are no records of diamond
drilling below the MacPhersons open pit and 95% of historic drilling data is shallower than
70 metres. We see good potential for MRP if drilling can deliver sufficient results to support
the big pit scenario, which would give the company a significant resource and mine life.
How the actual production profile unfolds will become apparent as scoping and feasibility
studies are completed. While the big pit option is being explored, the alternative for
management to stage pit development if it better suits milling requirements remains.
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
4
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
Figure 4: Stacked mineralised reefs below the 4 interconnected historical pits
Source: Company Reports
Tycho Deposit
The Tycho deposit is located 2km south of the Macpherson’s open pit and is the most
advanced of the regional prospects. The deposit is a Greenfield discovery with no previous
drilling or old workings. Mineralisation is characterised by shallow dipping biotite-chloritetalc shear hosted zones and on the back of phase 1 drilling MRP released a resource of
430kt at 1.5g/t for 21koz of gold. The company remains confident of increasing the
resource inventory with the latest round of diamond drilling indicating 2 shear hosted gold
zones that continue to a depth greater than 100m.
As seen in Figure 5 the deposit has minimal overburden (from 4m of transported alluvial
cover). The deposit style lends itself well to a low cost open pit operation which is
supported by the presence of mineralised halos around quartz shears that tend to grade as
high as 0.5g/t. We expect to see ongoing positive news from the current drilling program
and should see a resource upgrade at the deposit by Q3 FY2012.
Figure 5: Flat lying nature of the Tycho deposit – 2 zones of mineralisation (Spider 1 & 2)
Source: Company Reports
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
5
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
Drilling strategy for the 2H CY2011 at MacPhersons Gold project
The cross section shown in Figure 6 highlights the drilling program at the Macpherson Gold
project. Currently utilising 2 diamond drill rigs, MRP has indicated Franks Find, Bakers Find
and drilling under the Salvo and Kerry open pits as priority targets for the later part of this
year. Exploration upside to this drilling program is encouraging in that little drilling has
been completed over a depth of 50m and where it has mineralisation tended to continue at
depth. We note that management indicated that on completion of the current Tycho drill
out (late September) one of the rigs will be moved to the Nimbus project and begin
resource definition drilling. MRP also has an Auger rig working on defining regional
anomalies.
Figure 6: Drilling strategy at the MacPhersons Project
Source: Company Reports
Nimbus
The Nimbus mine and mill was a strategic acquisition which will fast track the company’s
journey to production. While the purchase represents an avenue to early production the
associated tenure also comes with a highly prospective silver deposit as well as polymetallic
zinc-lead and minor gold anomalies. Historically, Polymetals produced 3.6Moz of silver
between 2006-2007 at a head grade of 353g/t and cash costs of around $6.50/oz. With
today’s silver prices hovering around $40/oz re-birthing the silver project is significantly
attractive given potential margins.
The mill and landholding was acquired from Reed Resources (RDR) and was satisfied for
$3m in cash and $1.5m worth of MRP shares, with RDR retaining a 1% royalty on zinc
production from the two mining leases. A toll treating arrangement is also in place whereby
RDR can treat ore from its Sand Queen mine located north of Kalgoorlie.
Geology and Economic Potential
Geologically speaking the project sits along the Boorara Shear zone, which in the broader
region is associated with primarily gold and some polymetallic mineralisation. Nimbus is
unique and essentially a VMS deposit lying within the regional structure characterised by
associations of silver-gold-zinc-lead. None of the previous land owners were able to fully
delineate the extent of mineralisation but we highlight that this style of deposit tends to
occur in clusters thus supporting the exploration upside of the project.
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
6
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
In July this year MRP enlisted CSA global to undertake resource work based on historic
drilling and consequently released an exploration target of 6Moz of silver. Although
extensions to the mineralisation were modelled, wide drill spacing’s do not allow for a JORC
complaint resource. MRP is confident based on current modelling that the 6Moz target can
be upgraded to JORC resource categories on the back of drilling that is set to commence in
September 2011. Figure 7 demonstrate good high grade extension to mineralisation beyond
the floor of the old pit. We note that mineralisation does become transitional at depth and
previous owners noted an increase in mercury content with the more sulphide rich ore.
Figure 7: Block model highlighting extensions to mineralisation beyond the old pit
Source: Company Reports
The VMS style of mineralisation has also lead MRP to evaluate the economic potential of
association elements such as zinc and lead. As a result of the resource review there is the
potential to develop a significant zinc operation which sits down plunge of the silver
mineralisation (Figure 8). Initial wireframes of the mineralisation have indicated economic
potential for zinc mining at depth and along strike from the Discovery deposit. This aspect
of the project has never been the priority for any historic drilling program and we expect
good news flow as MRP explores this style of mineralisation.
Figure 8: Mineralised extensions at the Discovery pit (Blue =Silver, Green/Purple =Zinc)
Source: Company Reports
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
7
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
Modelling also suggests existence of up to 5 VMS lenses which are yet to be explored. With
this style of mineralisation typically clustering the potential for new discovery and
extensions to the know mineralisation is high. Figure 9 demonstrates wireframe extensions
to the mineralisation and also highlights the close proximity of the mining centres to the
processing facility.
Figure 9: Mineralised extensions to the Discovery pit
Source: Company Reports
Boorara
MRP has entered into a “binding” Heads of Agreement to acquire the Boorara gold and
polymetalllic project from Polymetals (PLY). The 33km2 landholding is comprised of 18
tenements and envelopes the Nimbus mine and mill. Located 10kms from the Superpit the
project comes with a JORC classified resource of 84.6koz of gold and good exploration
potential.
The Boorara Shear Zone is extensively under-explored and forms part of the Golden
Ridge/Kanowna Belle zone, recognised as the second largest gold production domain in the
Kalgoorlie region after the KCGM’s Superpit. Gold mineralisation typically occurs as quartz
stockwork concentrated along sheared contacts between intrusive dykes and metasediment
host rock. Exploration by current owners Polymetals has identified 4 areas of near surface
mineralisation along a strike length of ~1.5km.
Previous intersections of up to 7m at 112g/t (including 1m at 738g/t) are located 500m
north of the current resource and demonstrate the underexplored nature and potential of
the landholding. Furthermore, Boorara offers good prospectively for extensions to
polymetallic silver-gold-zinc-lead-copper deposits, both as Greenfield discoveries and as
mineralised extensions old workings. The Brindabella, Condor, Tramways and Gretal
deposits are examples of such polymetallic mineralisation within the landholding that
requires further drill out.
Upon the successful completion of due diligence, MRP will execute formal documentation to
acquire the Boorara Project from Polymetals for a consideration of $2.5m in cash (includes
$50,000 non-refundable deposit) and $0.5m worth of MRP ordinary shares.
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
8
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
Figure 10: The Boorara landholding enveloping the Nimbus silver mine
Source: Company Reports
Nimbus – the processing hub
As fore mentioned MRP is pursuing a processing strategy whereby the 200ktpa Nimbus
silver plant will be refurbished and a separate 490ktpa gold circuit will be introduced to
treat product from the MacPhersons gold project (Figure 10). MRP have indicated
commissioning of the mill toward the end of FY2012 and already started refurbishing major
components of the existing plant, begun acquiring additional equipment for the parallel gold
circuit and initiated connection to the mains power grid.
Figure 11: Simple flow chart of the parallel gold and silver Nimbus mill
Source: PSL Research
Start up mill feed for the silver circuit will be sourced from a 15kt existing stockpile which
runs up to ~200g/t silver and 100-170kt of tailings that runs between 100 and 150g/t
silver. This represents a low cost upfront means to generate cash flow in the short term and
should produce approximately 450koz of silver, which represent revenue of $19m at a silver
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
9
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
price of $40. Processing this material in the short term provides cashflow while MRP drill out
the silver resource and establish a mining strategy for the open pits.
We expect gold mining at the MacPhersons gold project to commence roughly inline with
commissioning of the plant. At this stage the Tycho deposit is shaping up at a likely start up
operation due the low stripping ratio and minimal capex requirement. With phase 2 drilling
to be completed shortly we expect to see a resource upgrade at the deposit which will
determine exactly how it fits into the production profile. The MacPhersons project “big pit”
option is shaping up as a longer term more robust ore supply that is not likely to come on
line in the near term unless management make the decision to stage development and
target areas of the resource that are most developed.
Valuation
While MRP is trading above our industry average on an EV/Resource metric at ~$228/oz of
gold, we expect to see a re-rating as resource upgrades from the MacPhersons Gold project
become apparent toward the end of the year. We see the near term production potential
and prospective silver/zinc resources from the Nimbus mines as not fully realised by the
market thus MRP offers good upside for the savvy investor.
Note that in the calculation of the EV/Resource we have assumed MRP to advance with the
Boorara acquisition, therefore the cash consideration and additional resource of ~86Koz are
factored into the calculation.
Figure 12: MRP on an EV/Resource metric
Source: PSL Research
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
10
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
Risks
Exploration and resource upgrade: The challenge remains with MRP to deliver on
exploration targets and upgrade the current resource base. If the company does go ahead
with the Boorara acquisition it will need to prioritise a drilling program that incorporates all
3 project areas and number of rigs available. Whether this involves an increased
exploration budget or re-evaluation of priority targets, the company is in a position
whereby it needs to increase its resource inventory as production is just around the corner.
Commodity Prices: Going forward the majority of MRP’s revenues will be derived from the
extraction and sale of gold and silver. Fluctuations in prices will affect the company’s
reserve estimates, ability to obtain financing and its financial condition. We envisage startup cash costs for the MacPhersons project to be higher than average due to prestrip/cutback requirements which has the company leveraged to the gold price in the start
up phase. While current gold and silver prices offer significant margins, caution must be
recognised as to future commodity prices.
Scheduling and timing: MRP has indicated commissioning of the mill toward the end of
FY2012. Commissioning should coincide with beginning of production mining from the
MacPhersons project as well as the ramp up of the tailings treatment at Nimbus. The
transformation from explorer to producer in the near term will need to be effectively
planned and managed.
Foreign Exchange Risk: As an Australian company, fluctuations in foreign currency
exchange rates between the Australian dollar and US dollar have the potential to decrease
the profitability of the company. MRP has not taken any steps to hedge against currency
fluctuations
Financial: If MRP do need to return to the market for funding there can be no assurances
that capital will be available at a reasonable cost which could see dilution issues in the
future.
Cutback mining: The MacPhersons gold project will require a significant cutback if it is to
proceed with the big pit option. The development of the cutback may have to be staged to
ensure it coincides with the commissioning of the processing facility in mid 2012. The
negative aspect of this option is that stripping ratios will be high in the developmental
stages which will drive up operational costs/oz.
Conclusion
We see MRP as a unique and exciting investment opportunity. A gold, silver and zinc
producer in the Goldfields is rare and a facet that will no doubt grab market attention as it
comes to fruition. With an extremely experienced, well connected management team we
believe the company of poised to emerge from infantile explorer to a dual commodity
producer by this time next year.
While FY2013 will yield modest ounces of gold and silver, near term production will reap the
rewards of high commodity prices and provide a solid footing for the company to grow.
With production only 9 months away we expect to see a steady news flow of resource
upgrades, project progress and scoping studies which will build further value in the stock.
We rate the stock a SPEC BUY.
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
11
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
Directors and Management
Ashok Parekh, Chairman – Executive Director
Mr Ashok Parekh is a chartered accountant who owns a large Accounting Practice in
Kalgoorlie, which he has operated for 25 years. He was awarded the Centenary Medal in
2003 by the Governor General of Australia, and was recently awarded the Meritorious
Service Award by the Institute of Chartered Accountants, the highest award granted by the
institute in Australia. Mr Parekh has over 25 years experience in providing advice to mining
companies and service providers to the mining industry. He has spent many years
negotiating with publically listed companies and prospectors on mining deals which have
resulted in IPOs and the commencement of new gold mining operations. He has also been
involved in the management of gold mining and milling companies in the Kalgoorlie region.
Morrie Goodz, Managing Director
Mr Morrie Goodz is a mining geologist and a Fellow of the Australasian Institute of Mining
and Metallurgy. He has 33 years industry experience including nine years experience in
international mineral exploration in North America and Africa. Since 1985 he has been
based in Australia with operational and strategic management roles at the A1, Morning
Star, Daisy Milano and Kalgoorlie Consolidated Gold Mines. Since 1987, Mr Goodz has been
the Principal Consultant of Goodz GMC, providing geological and mine planning services. Mr
Goodz was responsible for the project conception and discovery of the Daisy Milano shear
zone extension where, amongst other operations, he designed and constructed the current
decline and underground operations to the number 12 Level at the Daisy Milano gold mine.
Mr Goodz is actively involved in promoting mining education with various professional
bodies and the WA School of Mines, and was the Chair of the AusIMM Sustainable Mining
conference in August 2010. Mr Goodz is an active public speaker at conferences and
workshops on mine design, business improvement and strategic planning.
Jeff Williams Non Executive Director
Mr Jeffrey Williams has 16 years experience as a professional mining engineer in Australia
and seven years in the stockbroking industry, and is a Fellow of the Australasian Institute of
Mining and Metallurgy. His mining experience ranges from mine planning, underground
management and feasibility studies through to mine development. He has held various
positions with CRA Limited at Broken Hill and has played a major role as a Senior Project
Engineer with North Limited. Mr Williams is currently Managing Director of Mineral Deposits
Limited and a Non-Executive Director of Morning Star Gold NL. Mr Williams established
Nimbus Resources (now Mineral Deposits Limited) in 1997, and acquired mineral sands
assets from BHP-Billiton near Hawks Nest on the New South Wales coast in 1998. Mineral
Deposits Limited has since secured the Sabodala gold and Grande Cote zircon projects in
Senegal in West Africa, and commenced gold production in March 2009.
Stephen Hewitt-Dutton, Company Secretary
Hewitt-Dutton has over 20 years of experience in corporate finance, accounting and
company secretarial matters. He is an Associate Director of Trident Capital and holds a
Bachelor of Business from Curtin University, is an affiliate of the Institute of Chartered
Accountants and a Senior Associate of FinSIA. Stephen is currently Company Secretary for
three ASX listed companies. Before joining Trident Capital, Mr. Hewitt-Dutton was an
Associate Director of Carmichael Corporate where he assisted clients by providing equity
market, IPO and M&A advice and assistance. He has held Financial Controller and Company
Secretary positions for both public and private companies for in excess of 15 years.
Ray Wright, Operations Manager
Mr. Ray Wright has 45 years of mining industry experience, including 35 years as a Mine
Manager. In many of these projects, he has performed the role of owner/operator. Key
roles have included being involved in the development and production of the Maude &
Yellow Girl gold mines at Glen Wills, Wattle Gully gold mine at Castlemaine, Stannary Hills
tin mines, Atherton, the A1 & Morning Star gold mines at Woods Point, and the Daisy
Milano mine at Mt Monger in Western Australia. Mr Wright has also been involved in the
construction and expansion of processing plants relating to the above operations, including
the Burbanks gold processing plant at Coolgardie. Mr Wright is a certificated mine manager
and will act in the role of Operations Manager.
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
12
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
William (Bill) Powell, Prospecting Manager
Mr Bill Powell started prospecting in the family business from the age of ten. He has an
extensive mining history which covers the discovery and development of many mines in the
Kalgoorlie, Coolgardie and Higginsville gold fields. In 1983, Mr Powell was responsible for
the discovery of his namesake, the Powell open pit mine and then the re-discovery and
development of the MacPhersons Reward mine. Between 1984 and 1986, he discovered
several gold-bearing deposits which led to the first “Coolgardie Super Pit” prior to the
development of Kalgoorlie’s superpit.
Stock recommendations: Investment ratings are a function of Patersons expectation of total return (forecast price appreciation plus
dividend yield) within the next 12 months. The investment ratings are Buy (expected total return of 10% or more), Hold (-10% to +10%
total return) and Sell (> 10% negative total return). In addition we have a Speculative Buy rating covering higher risk stocks that may not
be of investment grade due to low market capitalisation, high debt levels, or significant risks in the business model. Investment ratings are
determined at the time of initiation of coverage, or a change in target price. At other times the expected total return may fall outside of
these ranges because of price movements and/or volatility. Such interim deviations from specified ranges will be permitted but will become
subject to review by Research Management. This Document is not to be passed on to any third party without our prior written consent.
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
13
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.
13 January 2009
RESEARCH NOTE – PATERSONS SECURITIES LIMITED
14
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility
or liability on any account whatsoever on the part of this firm or any member or employee thereof.