🕐18.01.11 - 01:00 Uhr

Exco Resources - Fox Davies Capital - Buy Recommendation - Upgraded Price Target: A$0.88



17 January 2011 Exco Resources (EXS AU) BUY Price: A$0.52 Target Price: A$0.88 Market Cap (M): A$178.4 EV (M): A$168.4 Event Exco has announced a resource update for the Vertigo deposit that has resulted in a 50% conversion from Inferred to Indicated resource for a total of 2.45Mt grading 1.04g/t containing 82,100oz of gold. Comment The last time the resources at Vertigo were calculated was 2007 and at that time the Inferred Resource was 2.53Mt grading 1.07g/t and containing 87k oz of gold.

There are now 1.22Mt of Indicated Resource grading 1.18g/t containing 46.2k oz of gold.

However, theres a further 1.229Mt of Inferred Resource grading 0.91g/t and containing 35.9k oz of gold.

Overall, the total resource figure is little changed but the degree in confidence in the figures has increased with the upgrade from the Inferred to the Indicated category. A Mining Lease application for the Vertigo deposit has been submitted to Primary Industry and Resources South Australia for approval.

The approvals process is expected to be completed through the second quarter of 2011. Metallurgical column testwork is ongoing and will be completed early in the second quarter 2011.

The reserve definition and detailed pit designs will be undertaken on completion of the metallurgical testwork.

Final mine scheduling and planning is targeted for the second quarter of 2011 in line with the mining lease approval. Although the quarterly figures were not presented, the accumulative figures for the year to date until the 31 December were quoted and by subtraction we calculate that the December quarter was the best one to date for White Dam.

On a 100% basis, 22.84k oz of gold were produced, some 30% more than in the September quarter, partly due to a modestly higher grade and a higher tonnage was also treated.

This is indicative of an annual production rate of around 80,000oz on a 100% basis. Whilst the operating costs were not released, it was stated that operating costs remain well below A$600/oz and the average selling price has been A$1,363/oz. The new target price incorporates the new copper, and gold prices and a revises A$ exchange rate that were published in the daily on Tuesday. Recommendation We retain the Buy recommendation with an increased target price of A$0.88/share, formerly A$0.85/share. To download the full note, please click here: http://www.uploadlibrary.com/foxdavies/ExcoFlashnote17Jan2011.pdf Fox-Davies Capital Contact Details Research: +44 (0)20 3463 5030 Sales: +44 (0)20 3463 5050 Media Enquiries: James Harris Professional Public Relations Tel: + 61 (0) 8 9388 0944
--------------------------------------------------------------------------- This email was sent by James Harris, Professional Public Relations, 588 Hay St, SUBIACO WA 6008 to Unsubscribe: http://esp.gewru.com/forms/u/410e1c6/12414/1785194111.html ---------------------------------------------------------------------------



Products & Services | Jobs