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Argent Minerals is a stock to watch as key milestones imminent

Argent is set to increase news flow across its three key projects.
Argent Minerals is a stock to watch as key milestones imminent
David Busch, CEO, recently speaking with investors

Argent Minerals (ASX:ARD) holds a portfolio of highly prospective projects in New South Wales, and the government is providing support.

Argent's three key projects, Kempfield, West Wyalong and Loch Lilly have all been awarded competitive NSW Government Cooperative Drilling funding totalling $750,000 to date.

These grants are not made lightly, and are based on the technical merits of the projects, as assessed by independent panels of experts from amongst a significant number of funding applications in a highly competitive environment.

Adding further support is $2.9 million in R&D rebates received since September 2013.


Kempfield to join +100Moz silver equivalent club

Argent's wholly-owned Kempfield project is registered as a NSW State Significant Development, hosting a polymetallic resource which remains open.

The pending resource upgrade will incorporate potential lateral and depth extensions identified by recent drilling, which according to the Company could swell the existing deposit dimensions by double.

Kempfield would in that case be expected to host up to 100 million ounces of silver equivalent contained metal, comprised of silver, gold, lead and zinc, versus the current deposit size of 52 million ounces equivalent.


West Wyalong

Investors new to the Argent story may not fully understand the importance of West Wyalong, but some longer term investors will as this is why they are in the stock.

The project is strategically positioned within an active gold producing region in central New South Wales.

West Wyalong is surrounded by major gold producers including Evolution Mining (ASX:EVN), Sandfire Resources NL (ASX:SFR), Goldfields and St. Barbara (ASX:SBM).

Providing some back story on the region and interest - Evolution Mining acquired the Lake Cowal gold mine for US$550 million in July 2015.

Lake Cowal is just 37 kilometres north of West Wyalong.

Argent currently has a six-hole 2300 metre diamond drilling program underway to test the Theia copper-gold porphyry target and the Narragudgil epithermal gold target.

It has been 17 years since the last diamond hole at West Wyalong, and anticipation is building.

Assays are expected from May to June 2017.

Argent's interest in West Wyalong will increase to 70% through the current drilling program.


Loch Lilly

Argent is farming-in to Loch Lilly, and from a cost to benefit ratio, it is simply a free kick for the company.

The joint venture is to earn 90% of the project which covers 1400 square kilometres of the Loch Lilly - Kars Belt in western NSW, which hosts polymetallic volcanic-hosted massive sulphide (VHMS), copper-gold porphyry and nickel sulphide.

Mineralisation in the region has the potential to be analogous to the Mount Read Volcanics of Western Tasmania.

Argent will earn a 51% interest in the project by completing a drill program to test two geophysical targets, Eaglehawk and Netley, each with one diamond drill hole to a depth of 500 metres scheduled to commence in May/June 2017.

Argent’s costs will be 75% co-funded by the NSW Government up to $150,000.

News will follow with exploration results.


Analysis

Argent has a market cap of circa $16 million, and estimated cash of $1.5 million, providing an enterprise valuation under $15 million.

The company's valuation has previously predominately been based on the Kempfield resource.

Currently - Argent's value per resource ounce comparable to peers is (~$0.45/oz Ag, ~$0.29/oz AgEq).

With Kempfield expected to double in size following the recent drilling programs, and if the resource is re-estimated towards the 100 million ounces of silver equivalent mark, this could provide the potential positive re-rating catalyst, purely based on the valuation metrics above.

Buts that’s just Kempfield.

The market is therefore currently placing little value on the West Wyalong or Loch Lilly assets, yet drilling results news is coming closer.

West Wyalong is surrounded by major gold producers, with diamond drilling assays pending in the short term.

Loch Lilly has a very minimal cost to Argent, where diamond drilling will commence in May/June 2017.

Any sniff from these two projects could provide a separate 'call to action' for investors.

The news is only just starting for Argent, and it very much remains a stock to watch.

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