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Copper Strike (ASX:CSE)


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Well I said I would do a post on Copperstrike similar to my Royalco post, thought id better hurry up though since the CSE shareprice has been going bananas recently.


CSE has pretty much the indentical board as Royalco but in reverse, and its focus is exploration and mine development, unlike RCO which has the twin focus of royalties and exploration.


The MD of CSE is Tom Eadie and is well known as one of the top geophysicists in the world...and a Canadian background if thats important :unsure:


The projects




CSE despite the recent shareprice spike, it is still extremely undervalued based on the fact that is it nearing the end of its feasibility study on the Einsleigh project, which is a copper/zinc/silver project (With some gold) in North Queensland. The actual feasibility i believe will be focussed on the copper and silver project comprising the Kaiser Bill and Einsleigh deposits, the latter being small but high grade with Kaiser being much larger but with lower grade.


This feasibility will be favourable, but what will be the kicker is the nearby Chloes prospect which has recently been found and has had some EXCELLENT (medium grade) zinc/lead results...this will significantly enhance the value of the project. Plenty exploration to go at Chloes, but its proably already in the multi million tonnes of ore stage. Assays from several holes have been responsible for the kickup in the shareprice, but there are several holes with assays yet to be received.


The Einsleigh project alone, based on identified resources to date, has around $1.5 billion in in-ground metal value. With the feasibility results around the corner, and continuing strong exploration results from Chloes likely shortly (As per recent announcement), there are further catalysts for the rerating to continue.


Walford Creek


This project actually has around the same metal value in ground as the Einsleigh project. I've recently talked to the company to see why it is not also a priority, and the feedback is that Einsleigh is the focus because of nearby infrastructure meaning more realistic development for a small company like CSE...the Mt Walford itself is quite remote however it would be a good fit for Zinifex to JV.


The above are the 2 key projects , but the Lake Margaret project, which should see some exploration soon, shouldnt be discounted, being in a very prospective area of Tasmania...CSE has tied up alot of the ground there.


Kamarga also is a great zinc project...basically it has massive resources already but at low zinc/lead grades of around 2-3% (though whether this can be considered low grade in the current zinc price environment is debateable)...CSE is confident however they will be able to find higher grade pockets there.


Despite the above, the CSE market cap is at a ridiculous 22 million...can you believe as recent as a couple weeks ago it was close to half of this?!?!?! I couldnt (which is why i loaded up).


If I had to choose between Royalco and Copperstrike, it'd be a tough choice (which is probably why I have equal amount of shares in each)...but for short-med term I would go CSE, while for a long term investment I would lean towards RCO...both are great long term, but I expect RCO will motor when it starts drilling the quality areas in Phillies next year and the royalties start flowing in. Further, I Expect CSE would be looking like a very tasty morsel to the likes of Kagara and Zinifex which all have projects and infrastrcuture in the area to which the CSE resources offer obvious value.


Worth listening to the following preso by CSE to Boardroom radio:







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  • 2 weeks later...

New Chloe drill results with good grades of zinc and lead and surprisingly high silver at Chloe east (and promising geology in the Lady Margaret exploration hole), a minesite article (they must have read my original post :lol: ), a boardroom radio interview and a positive ABN Amro research note all out on CSE today, yet price only up half a cent.


Picked up a few more at 39c today...still dirt cheap but looks like 40c might be hard to breach conclusively for now. Feasibility now to be released mid jan, they've delayed it till past the XMAS festivities which tells me the numbers are good so they want the entire market to see it. Would expect a resource estimate on Chloe's wouldnt be too far away either.


I also note that SmartTrans recently announced a JV with ZFX over their Nth QLD projects, which shows ZFX keenly looking around that area...would think that they know about CSE's Mt Walford project, surprising they havent moved on it yet though.



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  • 1 month later...

CSE has sufferred a correction since i last posted, particularly yesterday. I expect this is due to concern over the feasibility that will be released shortly.


Admittedly, the feasibility is likely to be weak particularly given the drop in base metal prices...however what the market has not factored in is that the feasibility will be based solely on the Einsleigh/Kaiser Bill copper project...


The reality is that CSE has found a heap of zinc at Chloes, which is right next to kaiser bill and einsleigh, and so any development will likely include chloes which will MASSIVELY impact the cashflow of the project.


I will be waiting for the fesibility then hoping for some further weakness after which i will be buying back the shares i sold in the 40s-50s.


Following which, CSE will be aggressively drilling at both kaiser, einsleigh and chloes to find more resources (and they will find more)...and also likely to jv Walford Creek at anytime after the feasibility is released. The SP will then recover lost ground and probably make new highs IMO...i expect all this around a 5-6 month time frame.



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  • 5 months later...

Some fantastic additional drilling results were announced by CSE recently, however the shareprice reaction was quite mooted with only a small rise. There appears to be some willing profit takers at the moment, probably from recent capital raising at 50c.


It is interesting to compare CSE with another ASX company that has performed very strongly, called Prairie downs (PDZ), also on the back of impressive zinc/lead/silver results.


PDZ has a market cap fully diluted of around 80 million (it has jumped today on some more good results). However CSE has a market cap of only around $47 million. Although both companies are quite impressive, I feel CSE has many more irons in the fire and the market cap compared to its peers (incl PDZ) is ridiculously low!


PDZ so far has the single promising project on which a scoping study was based on a 1 million tonne resource. Admittedly the resource will probably end up being significantly larger.


However, CSE has the following:


- two significant copper project at Einsleigh on which a favourable study suggested a solid financial outcome

- signficant zinc/lead/silver potential at its Chloes (and satellite deposits) project...although no real resoure estimate has been released yet (currently being calculated), I estimate that the Chloes, Young and Jackson deposits alone would amount to around 2.5 to 3 million tonnes of mid grade zinc/lead/silver

- Walford Creek polymetallic deposit which is probably going to be JVed to a nearby company, for which CSE will retain a significant interest in

- an majority interest in a spinoff company that is soon to list with some very exciting projects that were not getting the attention they deserved in CSE due to commitments on Einsleigh and Chloes

- Kamarga projet, which is a MASSIVE zinc project...though the zinc is low grade...there is a good probability though that within this resource they will be able to find high grade pods


Based on the above, I continue to believe that CSE presents fantastic value, personally $2 is not out of reach over next couple years in my opinion.. I am still jicking myself at offloading majority of my shares once they had doubled (I need to revisit my trading rules I think).



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