June 3, 2013
Edison Investment Research, a leading international investment research firm, announces the initiation of coverage of Duluth Metals (TSX: DM), a mineral development company focused on developing its Twin Metals Minnesota (TMM) copper-nickel-platinum group metals project.
Edison's comprehensive report,
Steadily unlocking value
, was published today, and examines the investment case for Duluth.
Highlights from the analysis by
, an analyst on Edison's mining team, include:
After a 60% increase in its 'indicated' resource in December, TMM is one of the largest Cu-Ni-PGM polymetallic sulphide deposits in the world, amounting to 2.4bn tons at 0.52% Cu, 0.17% Ni and 0.48g/t (3PGE).
A preliminary economic assessment of the project, conducted in 2009, envisaged a 40kt per day operation, producing 19ktpa Ni at a negative cash cost of
/lb over 22 years in return for an investment of
in initial capex. However, this will be superseded by a pre-feasibility study (PFS), currently underway, which is aiming to define a large-scale, vertically integrated mining complex with a phased underground mine plan and could potentially indicate a doubled throughput rate of 80ktpd.
is contributing 65% funding for the TMM JV, thus reducing Duluth's cash requirements. Cash is currently around
exercises its option to acquire a further 25% of the TMM project, we estimate that Duluth requires only a further
to fund TMM through BFS and pre-construction alongside its exploration programme, which it should be able to fund through equity.
Edison's base case valuation of Duluth is
after dilution, or
with the completion of the TMM project PFS.
Duluth Metals is a mineral development company focused on developing its Twin Metals Minnesota copper-nickel-cobalt-platinum-palladium-gold-silver project via a joint venture with
For the full report see:
The launch of coverage on Duluth Metals marks a further expansion of Edison's worldwide mining coverage. Edison provides research coverage on more than 100 mining companies across the UK, mainland
and Australasia. All reports published by Edison are available to download free of charge from its website
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