VSA Morning Miner – NQ Minerals

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VSA Morning Miner, 25/08/20


NQ Minerals (OTCMKTS:NQMI) has announced plans to restart underground exploration at the Hellyer mine where the company is currently in production and retreating tailings. The potential has always been recognised by the company, however, the recently negotiated debt refinancing is clearly already having a positive impact and freeing up budget for exploration. Initially this will likely take the form of geophysics and other surveys to build on the exploration work and datasets acquired from the previous owners Bass Metals.

Bass operated the underground Fossey Deposit, 150m from the Hellyer deposit until 2012 and NQ are now processing the tailings which are combined with those from the main deposit. With an initial ten-year life, NQ has always highlighted the need for additional ore to fill the mill beyond the life of the tailings operation and building on the work of the previous owners is a strong starting point. Given multiple targets left untested, when Bass halted operations, the immediate area is clearly underexplored and the proximity to the existing plant makes these priority targets for exploration, in our view.

We reiterate our Buy recommendation and target price of 22p/sh.

Oliver O’Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: [email protected]

Paul Renken, Senior Geologist | T: +44 (0)20 3005 5011 | E: [email protected]

VSA Capital Research | T: +44 (0)20 3005 5000 | E: [email protected]

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