With shares trading around 12.5 cents per share, the price target of 16 cents represents potential upside of 28%.
Emmerson holds 2,600 square kilometres of ground near Tenant Creek, NT and 2,400 square kilometres near Fifield, NSW.
The company is both a gold producer and gold and base metals explorer.
READ: Emmerson Resources extends high-grade gold mineralisation at Tennant Creek with more bonanza gold grades
The Harleys research report was published following the release of diamond drilling results earlier this month at the 100% owned Mauretania Project in the Northern Territory.
The maiden drilling produced high-grade results that exceeded those seen during similar stage drilling at the recently commissioned Edna Beryl Gold Mine which is one of Australia’s highest-grade gold mines.
Hartleys research report
The following is an extract from the Hartleys report dated 8 July, 2019.
Mauretania enhanced by more high-grade gold
Emmerson Resources (ERM) recently completed diamond drilling at the high-grade Mauretania Project (100% ERM), Tennant Creek, Northern Territory.
The program has been highly successful in enhancing the original nearby reverse circulation (RC) results, and also highlights that some of the original RC assays may have been under-called in terms of reported gold grades.
The latest drilling at Mauretania was the first diamond program completed over the high-grade gold discovery, designed to test the shallow oxide/supergene and deeper primary gold zones within a mineralised system that remains open.
Further diamond drilling is planned in the project area, but prior to recommencing, geophysical sub-audio magnetics (SAM) will be used to identify weakly magnetic (potential deeper primary gold) and conductive (potential copper) targets within the system.
The SAM survey has now been completed with processing and interpretation now underway. We continue to see potential for Mauretania to progress to a small-scale but very high grade mining proposition (open pit and potential underground), and look forward to the results from the SAM survey and the restart of drilling.
Advancing greenfield discovery through to a mining opportunity
Gold mineralisation within the Mauretania area was first discovered by ERM in late 2015, intersecting 30m @ 3.22g/t Au from 57m (incl. 15m @ 5.67g/t Au) in the discovery RC hole (MTRC006).
Subsequent follow-up activities defined a high-grade poly-metallic (gold, copper and silver) mineralisation from near-surface, which extends into primary mineralisation at depth. The mineralisation at Mauretania is largely hosted within altered (haematite-talcchlorite) ironstones.
Latest drill results includes the best to date at Mauretania, with drill-hole MTDD003 reporting an impressive 20m @ 38.5g/t Au from 92m (incl. 4m @ 158g/t Au), adding to the oxide (supergene) mineralised zone which has potential to be extracted via a small open pit.
Diamond drilling also confirmed and added continuity to the primary high-grade gold zone with 6m @ 14.2g/t Au from 201m (incl. 3m @ 25.1g/t Au from 203m), highlighting potential underground mining opportunities.
100% ERM owned project area with commercial options
Mauretania is contained within tenure that remains 100%-owned by ERM.
ERM also has a strategic alliance with Territory Resources (TTY) to assist in the commercialisation of small-scale mining options within the field, and recently completed the sale of the Warrego mill lease to TTY to facilitate the construction of a new processing plant.
The plant is expected to be operational before CY19 end, and will initially process only gold-rich ores (copper circuit will be added later).
A profit share and gold royalty has also been negotiated over a number of small gold mines within the portfolio, and ERM is currently receiving a 12% gross royalty from gold produced from the Edna Beryl mine. These proceeds continue to fund ongoing exploration.
We estimate ERM’s current cash to be ~A$3M, after receipt of the final payment for Warrego mill lease, Edna Beryl gold royalties and adjusted for recent exploration spend. We maintain our Speculative Buy recommendation with our latest price target 16cps.
ERM has a sensible self-funding exploration model, whereby its portfolio of small mining opportunities can be commercialised under a profit share/gold royalty stream.