Metminco

SPECULATIVE BUY

11/08/2010 Robert Tyerman

Peru copper play Metminco says drilling has identified eight major targets in a cluster at its Los Calatos project. The company, which has so far established a resource estimate of 4.7m tonnes of copper equivalent at an average grade of 0.51% at the project, indicates the cluster occurs within an area of 68 sq km.

Metminco, based in Australia and quoted Down Under and on AIM, suggests clusters such as this often occur in large systems hosting multiple deposits, such as Escondida in Chile, the world's largest copper producer. The company controls Los Calatos, containing molybdenum as well as copper, in a mineral-rich area of southern Peru, through its 71.9% owned subsidiary Hampton Mining.

Chairman John Filmore floated Metminco, which later recruited mining financier and small company boss Tim Read to its board, in April, with a £12m AIM placing at 9p, handled by broker Daniel Stewart, and a £2.65m convertible issue. The shares have now reached 12.5p, but, if Los Calatos and other projects continue to yield encouraging results and copper retains a following, they could still reward bold punters.

Tags: AIM, Boardroom moves, Commodities, Emerging markets

Sector: Mining

Companies: Metminco

Market cap: £99m

PE Forecast: n/a

Share price: 12.5p