Posted: Sat Mar 08, 2008 8:44 pm Post subject: fortune minerals Price Target $5.00
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Fortune Minerals Ltd. (FT-TSX, $1.5 - SO-S
Price Target $5.00
Cliff Hale-Sanders, CFA
Initiating Coverage; 75% Off Asset Value Sale Continues
( researchcentral.cibcwm......-PDF-2.pdf )
As of March 7, we are initiating coverage of Fortune with a Sector Outperformer-Speculative rating and $5.00 price target.
Fortune offers investors exposure to a wide variety of commodities, namely cobalt, bismuth and gold from its NICO project, and a staggering amount of anthracite coal from its Mount Klappan coal project in B.C. Fortune has completed positive bankable feasibility studies for both projects.
At NICO, the company is targeting a modest-sized mining operation at a capital cost of around $215 million. Using reasonably conservative long-term metal prices, we calculate this project is worth $150 million on an after-finance basis. At current metal prices, this rises to over $600 million.
At Mount Klappan, development scenarios presented in the feasibility study placed NPV values in the $400 mln. range. That said, given the scope of the resource, the project is likely more valuable to a larger mining company. As such, Fortune is targeting a partnership to move this project forward.
Please contact myself or Greg Taylor if you require additional information.
Sincerely,
Jennifer Gauthier
Fortune Minerals Limited
140 Fullarton St., Suite 1902
London, ON N6A 5P2
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