This year presents Amur Minerals with an opportunity to update a former pre-feasibility study for its flagship Kun Manie nickel-copper project.
Analyst Tom Hayes said that drilling results in 2012 have pointed to an overall increase in nickel and copper grades by 46%and 36%respectively at the site in Russia.
Drilling last year doubled the strike length at the Maly Kurumkon part of the project to at least 2km by joining it up with the east-bound Flangovy block.
And results from Flangovy showed that it contains higher nickel and copper grades than estimated in the 2007 pre-feasibility study.
The company has targeted the first quarter of 2013 to begin work on updating Kum Manie's resources and reserves,which in turn will lead to this key revised PFS.
Mr Hayes notes that Amur will be able then to provide better definition of higher grade zones.He said that"This greater definition of grade distribution will likely have a positive impact on a revised mine schedule by allowing extraction of higher grades to be mined in the first years of operation.''
Kun-Manie currently has a total resource of 68.5 million tonnes at 0.5%nickel.
"Until Amur collates all its recent exploration and metallurgical test work results into a revised financial model for Kun-Manie,we reiterate our previous estimate of this project's value of USD 394 million or GBP 0.71 per share(at USD 20,000/t Ni and 10%discount).Mr Edision said that"This was primarily based on the old 2007 SRK Consulting pre-feasibility study,which will now be revised in light of the new exploration results.''
"This valuation should be considered conservative in light of the recent developments at Kun-Manie and with regards to its metallurgy.We will update our valuation when the PFS is released."