Kaiser had some positive comments on LTH on a writeup back in January with a target of .75 -1.00. Well Zinc prices are higher, PEA is being done and if they are going to do a another financing they will want to do it it at a higher level....
Bottom-Fish Comment - January 11, 2010: Lithic private placement closes and stock climbs aboard zinc uptrend
Lithic Resources Ltd reported on January 7, 2010 that the private placement of 5 million units at $0.15 it had announced on December 15, 2009 has closed. Lithic also granted 1.1 million options at $0.33, bringing options to a total of 3,350,000 shares. The company has now filed its Crypto technical report on SEDAR and is taking steps to initiate a scoping study whose outcome will be key to what the number-crunchers come up with in terms of discounted cash flow values for various mining scenarios at different zinc prices. This study will take several months, but that will not stop Lithic from trying to raise at least half the US $-6-8 million cost Chris Staargaard projects for the next stage of work at Crypto during Q1 of 2010. Strong metal prices during the first week of 2010 have boosted the prospects of doing so, as suggested by last week's jump in Lithic's stock price as a new group waded into the market. We initiated a Good Relative Spec Value Buy at $0.24 on December 16, 2009 with a short term target in the $0.50-$0.60 range, a natural level for Lithic to pursue additional financing if the market mood for zinc plays, particularly ones with an indium spin, continues to strengthen. At this point Lithic is well above our bottom-fish buy range below $0.10, and, with the seeds for a major speculation cycle planted, there is little likelihood that the stock will retreat into the bottom-fish buying range. Accordingly we are converting the bottom-fish buy recommendation into a Spec Cycle Hold 100% recommendation, with a price range of $0.75-$1.00 as a reasonable target for later this year if Lithic gets the financing for its 2010 program and zinc maintains a price above $1 per lb. Bonus upside would come if Crypto's indium content starts to attract security of supply interest from indium end-users, or if the exploratory drilling that will be part of the 2010 program reveals a significant high grade silver system beneath the Utah workings, deep drilling beneath the zinc skarn fleshes out the previously encountered high grade moly system, and, perhaps most importantly for the mine development scenario, the eastward extension of the zinc skarn mineralization boosts the overall zinc-indium resource. The big question will be whether or not Lithic's Crypto project achieves sufficient credibility to justify taking the project through feasibility in 2011, a stage involving underground drilling that is likely to cost in excess of US $20 million. The scoping study will play a key role in establishing that credibility |
