The next 12 months will be a "formative period" for True North Copper Ltd (ASX: TNC), Morgans says, as they tip the shares to more than triple in value.
Morgans released a new research note on True North yesterday, followed by an exploration update from the company today.
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More positive results
The company said it had completed a geophysics program at its flagship Mt Oxide project in North Queensland, and "the results have expanded the potential strike of the Aquila copper-cobalt-silver discovery and generated additional high-priority drill targets along the Mt Gordon Fault Zone''.
The company said drilling at the Aquila discovery had shown a strong correlation between "IP chargeability and conductivity anomalies and broad zones of shallow copper-cobalt-silver sulphide mineralisation''.
The new IP survey expanded the chargeability anomaly to about 500m north of current drilling, "highlighting further growth potential within the emerging copper-cobalt silver system''.
The company added:
The Phase 1 IP program has provided important targeting data to support refinement of the next drilling phase at Mt Oxide, including extension drilling at Aquila and testing of newly identified parallel structures along the broader mineralised corridor.
True North Managing Director Andrew Mooney said:
The completion of the Phase 1 IP geophysics program marks another important step in our strategy to systematically grow the Mt Oxide Project and unlock the broader scale potential of the system. Extending the Aquila IP anomaly a further ~500 metres north has now grown the target to more than ~1.5 kilometre in strike extent, with mineralisation and geophysical anomalies remaining open along strike and at depth beyond current drilling. This is a highly encouraging result and further reinforces the significance of the new high-grade Aquila copper-cobalt-silver discovery.
Shares looking cheap
Morgans said in its research note to clients that outside of the Mt Oxide project, it expected recent drilling at the company's Cloncurry Hub project to support operations, which could produce about 9000 tonnes of copper per year.
Morgans said:
TNC offers exposure to a staged copper growth platform, combining near-term development optionality at Cloncurry with district-scale exploration leverage at Mt Oxide. We are attracted to TNC for: 1) a clearly defined three-pillar strategy across development, growth and discovery; 2) material resource growth potential at Mt Oxide; 3) exploration upside across multiple projects; 4) infrastructure-rich operating environment; and 5) experienced management with relevant base metals development and operating expertise.
Morgans has a speculative buy rating on True North Copper and has upgraded its price target from $1.20 to $1.30 due to higher expected gold credits.
True North shares are currently changing hands for 40 cents. The company is valued at $60.9 million.
