I had the pleasure of spending a morning/afternoon over two days with Minotaur Exploration (MEP) in Adelaide and came away impressed with not only their project portfolio but also the high level work being undertaken on a number of exploration targets. I understand that the quality junior explorers are struggling for interest and any strength is being sold into, however this is far from being normal and eventually risk appetite returns and in some cases overshoots to the upside.
Speculators simply don’t understand what is required in generating a target and the red tape companies have to endure simply to gain land access. Many also assume that no announcements means no work is being done, however even when share prices are moving in either direction nothing much changes in the way business is carried out and it is often false paranoia that can lead to even the most loyal shareholders losing faith.
In a market focussed on the immediate-term and demanding instant gratification it is pleasing to note that MEP have now generated a “classic blind target” at Catch Dam that is a very exciting prospect. The target is a Broken Hill Type (BHT) base metals deposit and as per my report it has a lot going for it. This is what MEP do best (despite recent barren holes or the odd sniff) and this is has the potential to trigger a major re-rating. The Cloncurry Projects are most interesting and at Osborne they have generated 12 exciting targets. For those who like to follow what the neighbours are doing it might be worth perusing IVA’s announcements relating to its Yeti IOCG target. MEP’s Cassowary target is proximal to Yeti, with MEP having highly prospective ground in regions surrounding existing resources, close to processing facilities.
MEP appear not to have benefited from their near-ology to RDM’s Maronan Project and could be worth following should RDM gain some positive momentum.
Juniors such as MEP can remain undervalued longer than speculators can remain interested and/or solvent, however there is a number of potential catalysts that I have included in the report. It could only take one of these to see interest return to MEP, however in the event of a major discovery the best side to be on is always the sell side, although the early profit takers in Sirius would disagree.
Despite a lack of interest, momentum, and discussion on financial forums, MEP remains one of my preferred junior resource companies. The management/technical team have not only proven themselves in exploration, they have also shown some corporate nouse with the divestments of Gawler Craton tenements and MEP’s interest in the Tunkillia Gold Project.
There is considerable value in MEP’s development assets and ASX investments and if management can unlock this value, shareholders will be well leveraged to an on-going flow of exciting targets, that could see a return of the windfall profits attained by Minotaur Gold shareholders in late 2001/early 2002 when they drilled into what is now known as Prominent Hill.
Read the full report here MEP Issue