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In the news: Burey Gold, Peninsula Energy, Base Resources & MYCELX Technologies

In the news: Burey Gold, Peninsula Energy, Base Resources & MYCELX Technologies

Burey Gold†† has announced stunning results from its first assays at Douze Match. This is part of the company’s 55%-owned Giro Gold Project in the north-eastern DRC. Jim Taylor and Imogen Whiteside pounced on this quickly, and released Burey Gold — Stellar Assays from Douze Match, 24 June 2016, earlier today.
The first assays from Douze Match included 15m at 256 g/t, an extraordinary result from just the first ten RC holes drilled. These results also included extremely high grades that we expect to generate significant interest and which attest to the real potential Giro offers.
Burey announced assay results for the first ten RC drill holes from large Douze Match target. These results included:
• Hole DM-RC003 — 15m grading 256 g/t from 15m (including 3m at 1,260 g/t and 3m at 14 g/t) and 2m at 196g/t from 12m
• Hole DM-RC004 — 12m grading 21 g/t (including 3m at 77 g/t)
• Hole DM-RC005 — 33m grading 6.1 g/t (including 3m at 35 g/t)
We maintained our SPECULATIVE BUY rating. The assays demonstrate grade, and the next step is to determine tonnage. While the assays are likely to generate a significant amount of excitement, given their early-stage nature they are also provoke questions as to just how much we can infer from them. Since high-grade holes DM-RC003 to DM-RC005 were closely spaced on the same drill line, the assay results from holes south of the contact zone on Line 3 — which is 250m to the west of Line 4 — will be very significant in terms of confirming if the high-grade material has tonnage potential. The next results are due in early July.
We will be marketing Klaus Eckhof, Burey’s Chairman, in London on Monday and Tuesday next week. Interest is likely to be high, so please come back to us quickly if you’d like a meeting.
Jim and Imogen have been very busy. They also put out Peninsula Energy†† — Valuation and Lance Timeline Update, 23 June 2016, yesterday. They have updated their valuation of Peninsula to reflect: the revised ramp-up timeline at Lance, with production guidance moving from the 1Q16 estimate of 410,000lb U3O8 to 200,000-300,000lb; the recent Stage 2 funding arrangements, comprising an already-drawn US$15m convertible and a US$25m revenue streaming facility term sheet; and our revised LT uranium price deck.
They reiterated their BUY rating, with a revised target price of A$0.95. This utilised a long-term uranium price of US$55/lb, reduced from US$60/lb, based on which they derived an NPV8 for Lance of US$184m. They continued to attribute US$20m to risked other interests, mainly comprising a subjective estimate of the Karoo Project value. Allowing for expected future G&A expenses, and anticipated net cash at FY-end, they arrived at a valuation for Peninsula of US$160m. Both the net cash and the Lance valuation were adjusted for assumed finalisation of the streaming facility.
Finally, Tim Carstens of Base Resources*† will soon be here. We’re marketing him in London on the back of 4QFY16 results on Tuesday 12 July till Friday 15 July.

LON:MYX | 28p | US$7.3m | Buy | TP : 80p
Upstream Agreement with Schlumberger
MYCELX has announced an agreement with Cameron, a Schlumberger company, covering the exclusive marketing and distribution of its products. As per the agreement, Schlumberger will exclusively vend MYCELX products to the upstream market, with a particular focus on collaborating with the company to gain market share for the new RE-GEN product line. The company will continue to be sole provider of its products and services to the downstream market.
COMMENT: The agreement with Schlumberger should evidently be highly material in terms of providing a step-change in the scale of the distribution platform for the company’s products. Schlumberger is the world’s largest oilfield services company, with a trans-global workforce to provide to the upstream industry, and a market cap of US$111bn, dwarfing peers such as Halliburton (US$39bn).
On the back of most recent company guidance for 2016E baseline revenue and whilst we await to see the impact of the Schlumberger agreement, we maintain our Buy recommendation, with a DCF-based target price to 80p.

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