Orion Gold NL (Orion Minerals Ltd) - February 2016 Report

In Prieska, Orion has the opportunity to acquire a relatively low capex, short term start-up operation that could be a company maker. This is a shrewd move, taking advantage of low asset values to pick up what is potentially a very valuable resource at a bargain basement price that could be brought into production in time to take advantage of any increases in metals prices. The historic operation comes with extensive records of previous operations, has extensive mine development in place and unmined mineralisation. It is well served by regional infrastructure, including transport, power and water. Vitally, the acquisition has the required BEE ownership structure in place and comes with a ZAR30 million financing facility being secured. Very encouraging results have also been returned from exploration over the Australian projects. The key Connors Arc and Fraser Range areas are located over geology considered highly prospective for the styles of mineralisation being sought, with this being confirmed by exploration results. We rate Orion as a SPECULATIVE BUY, with a base case price target of $0.052/share. Download the flashnote for more information…