WHI Securities published a note on Kryso Resources PLC (LON:KYS) today, putting a price target of 25 pence on the stock, an approximate 66 percent upside on the current price of just over 15 pence.
The broker visited the flagship Pakrut gold project in Tajikistan in late 2010, met with both corporate and on-site management and inspected both the underground and surface developments. The immediate major target is gold which, since the visit, has advanced in price by over a third.
"Kryso can be optimistically defined as both an exploration and development company with targets in a spread of high profile metals which include gold, nickel, cobalt and the PGMS."
These are all located in the former Soviet Republic of Tajikistan. The flagship project is the Pakrut gold mine in the heart of the prolific Tien Shan belt of central Asia.
WHI Securities said the facilities are in place for Pakrut to become a significant producer within a short investment timeframe. The resultant cash flow can be employed to develop the company into a multi-metal producer in an established mining area.
Kryso has recently strengthened significantly its senior management and has hardened its relationship with the China Non-Ferrous Metals International Mining Company (CNMIM), under which the latter would provide design and construction for Pakrut. Kryso has set up an office in Beijing, China to further the process.
Continued drilling shows solidly economic grades and widths on the gold veins at Pakrut, which are open on strike and at depth. The bankable feasibility study (BFS) is completed, the gold price exceeds US$1400/oz compared with the model basis of US$879/oz and shares have been placed to advance the proposal with China Non-Ferrous Metals.
With an average gold production of 82,000 ounces of gold per annum over the first 4 years in a producing and potentially prolific belt in central Asia. Kryso has a well-drilled, partially developed gold project.
Pakrut lies in the centre of the Tien Shan gold belt, which embraces Uzbekistan, Tajikistan, Kyrgyzstan and China. This major trend is already a significant producer and has the potential to contribute up to 10 percent of the world’s total mined gold annually. Kryso has three other, adjacent gold occurrences within its exploration territory which are yet to be evaluated.
The company also has the exploration rights to a nickel, copper, cobalt and PGM prospect which is held in a separate entity within the Kryso group.
Kryso wholly owns the Pakrut gold deposit which has a JORC compliant resource across all categories of 3.024 million ounces, WHI’s report concluded. Drilling continues and its results are expected to lift more of this resource from the inferred to the measured and indicated categories.
"We recommend an investment in Kryso with a target price of 25 pence," the broker said.