Antofagasta (ANTO LN) - to remain focussed as a copper company with gold and molybdenum by-products

• Antofagasta is to remain focussed as a copper miner according to comments made by Marcello Awad the ceo at the Cesce copper conference in Chile (Dow Jones).
• The company has looked at the acquisition of other mineral assets but has recently shied away from bidding from these as other companies with more specific experience competed in the bidding process.
• The company also commented on their view that a potential rise in 'oil prices over $120/bbl poses a serious risk to economic growth'.

Allied Gold (AGLD LN) 40p, mkt cap £131m - Trading Halted on the ASX pending release on capital placement

• Allied Gold has applied for its shares to be halted on the ASX in Australia pending the results of a capital placement.
• The halt should continue till the opening of trade in Australia on 7 April.

Carbine Resources (CRB AU) 37p, mkt cap A$37m - Geochem show further 1.2km of gold anomalies

• The team have discovered two new areas of gold bearing mineralisation in upper saprolite greenstone bedrock.
• The new prospects show some 1.2km of gold geochemical anomalies in the region with high grade sample results including 14.1g/t and 11.9g/t. Note; samples are often collected from artisanal spoil heaps and are identified as coming from within the deposit, eg the samples are not just surface float material.
• While these results may not indicate an economic discovery they are pretty exciting as results go and could give investors some cause for optimism.
• The Wagande and Wagande South Prospects may be linked beneath drainage channels potentially increasing the strike length to 1.8km.
• This brings the total strike length of gold anomalies within the Madougou permit to 9.5km.
• Drilling is to start later this month to test the Dore prospect and latterly should also test the new Wagande discoveries.

Conclusion: We view these results as highly encouraging and sufficiently good to warrant buying more stock in Carbine Resources.

Kirkland Lake Gold (KGI LN) 890p mkt cap £602m - Reserve and resource update adds ounces

• Exploration in the last 7 months has advanced the South Mine Complex (SMC) to the critical mass of 1.34moz with a further 723,000oz in the inferred category grading 24g/t. Exploration is focusing on converting inferred resources to indicated status, test unexplored areas and replace all ounces in the Main Break and SMC.
• Proven and probably reserves at SMC are up 5% with 758,000oz at 22g/t, measured and indicated resources were up 17% with 578,000oz at 20g/t with inferred rising 7% to 723,000oz at 24g/t.
• Across the whole mine proven and probable reserves stand at 1.465moz at 16.6g/t, measured and indicated resources at 1.328moz at 14.4g/t with inferred resources at 1.043moz at 18g/t.
• The resource growth has more than offset depletion from mining with 17,000oz mined in the period from the Main Break areas. New drilling platforms have been established to drill the main break with additional ones to come.

Sable Mining (SBL LN) 23p mkt cap £213m - Acquisition of iron ore project in Sierra Leone

• Sable Mining has acquired an 80% interest in Red Rock mining in Sierra Leone which holds a 50 year lease over 206.75km² covering the Bagla Hills, Tonkia Kingdom iron ore deposit near the Liberian border where BIF horizons have been identified.
• The asset has a non JORC historical resource of 838mt at 32% Fe. It is located around 80km from the coast and 12km from a disused railhead at Kongo in Liberia which makes the logistics considerably easier than other projects in West Africa. The geology looks encouraging regarding upside size potential according to management.
• The company plans to start drilling to expand the existing historical resource and convert it to JORC status. The historical work carried out dates back to the 70s with 6,600m drilled in 29 holes over a 200-300m spacing across a 1.5-2.5km strike with widths 100-500m up to 200m depth.
• At the Southern portion of Bagla Hills there is a moratorium and prohibition to mining and exploration imposed by the government, work is underway to try and lift this.
• The cost of the acquisition is not known.

Zanga Iron Ore Company (ZIOC LN) 155p, mkt cap £429m - resource grows to 4.0tbn from 3.3tbn

• The Zanaga Iron Ore Company has increased its iron ore resource to 4.0tbn from 3.3tbn in the Jumelles project
• Zanaga has now drilled some 91,155m of which 67,432m are included in the new JORC resource
• The JORC resource now accounts for some 25km of the 47km trend
• Xstrata has now assumed control of the project and is expected to announce results of its pre-feasibility study in Q3.

Medusa Mining* (MML LN) 465p mrt cap £853m - Drilling at Co-O returns further spectacular grades

Corporate - Buy - TP 549p

Drilling results from exploration programmes in and around Co-O continue to return excellent results from surface, underground and regional programmes currently underway, adding confidence in the potential for the delineation of additional resources to support the enlarged 200,000ozpa target and for extending the mine life.

• Amoungst the latest round of drill results there are some spectacular intersects from this special resource. One hole returned 2m at 219.17g/t, with other drill results showing numerous intersections in line with past drilling e.g. 0.5-2m intersects over 10g/t Au.
• Drilling is continuing with two rigs on surface (may be reduced to one depending on progress) testing the Co-O mine area, four rigs carrying out regional drilling, and four underground rigs. These will continue to provide newsflow and yield results to contribute to a resource update that will probably come out mid year.
• Some of the latest exceptional results returned from the underground drilling programme are from a new, wide, sub-vertical high-grade zone within the mine identified from drill holes located near the Oriental Fault that cross cuts the system north to south and sits reasonably centrally over the mine's foot print identified thus far. This could be part of a new high grade vein to be developed for contribution to the resource and mine production.
• The regional drilling focussed to the north of the existing mine has picked up veins at surface. These shallower structures tend to be lower grade, but experience from the Central Vein and others from surface indicate that often the grade picks up from around 80m below ground. Drilling from close to surface also indicates that the mineralisation identified may still be high up in the system and that the tops of the well formed veins could be in excess of 200m below surface, based on historical experience with the vein structures at Co-O and how they evolved as the asset was developed. Deeper drill holes returned intercepts in line with drilling at and around the existing resources.
• Medusa has had an assessment of the Co-O mine architecture by independent structural geology consultants who have advised that the vein architecture is very similar to the Martha Mine in the Hauraki Goldfield of New Zealand. The Martha mine produced 5moz gold and 11moz silver since it started in 1880. The foot print of the mine was 1,600m long and 500m wide and comprised of a braided system of four main sub parallel veins mined to 600m depth. In comparison, Co-O is currently 1,500m long and 500m wide with development having just started going down to 250m below surface. Exploration results have returned intersections well below this indicating depth extensions likely to be explored and developed further down. Also the regional exploration work is identifying structures that could widen the footprint.
• Valuation: We maintain our valuation of Medusa at 549p/share. Our gold price assumption uses an average of 1,339/oz for the remainder of this financial year (ends in June) then US$1500/oz next year falling to US$1,000/oz by 2016. We have assumed that the expansion to 200,000ozpa takes place over 2014 with production at 125,000oz next year and the following year (now running ahead of this). We've assumed cash costs of US$210/oz for the expanded operation and capital cost of US$86m for the expansion, as well as sustaining capital at the mine of US$8mpa and US$2mpa on plant and equipment. As Medusa is an established dividend paying gold producer we have applied a 75% premium to the NPV of the Co-O mine (8% discount rate), we would look to raise this premium as details on the expansion plans firm up. To add to the value of Co-O we have also included US$52m for exploration (includes 650,000oz Bananghilig resource), year end cash and bullion holdings (valued at today's gold price) that total US$43m. Cash generation from Co-O should be more than ample to fund the expansion programme.

Conclusion: Further good drilling results continue to highlight the quality of the Co-O mine. The identification of a new high grade zone demonstrates that there is still plenty to be discovered within the vein system. We also note the comparison made to the multi million ounce Martha Mine in New Zealand giving additional confidence that the potential for a multi million ounce deposit from this kind of structure does happen. With such an aggressive exploration programme in place at Co-O we expect continued newsflow. We also look towards exploration results at other projects such as Bananghilig and Saugon where drilling is in progress, as well as copper targets. Additional newsflow should come from development work on the expansion of the mine for which design work is underway.

Source: Fairfax & Medusa Mining

* Fairfax acts as Financial Advisor and Broker to Medusa Mining

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