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 Reports and Commentary from the Investment World

Reports and commentaries are posted here on a regular basis.


Iberian Resources


Iberian ResourcesIberian Resources (ASX: IBR)

Explorer to producer is the goal of every gold bug.
This company is on the verge of moving from an explorer to a large - scale gold producer.
Iberian's profit should increase from an estimated A$5 million in 2006-07 to A$16.7 million in 2007-08.
These figures suggest that  Iberian is trading at a P/E of less than 4!
The company's market capitalisation also appears low given the value of its proven gold reserves.

The up and coming merger with Tamaya Resources Ltd makes the valuation of this company even more compelling.

Iberian and Tamaya are highly complementary companies; both are International explorers and operators.
Both are acquisition and project driven, both are emerging and growing producers.
The merger would create an organisation with Sovereign and commodity diversity, complementary management skills and a valuation uplift can be expected due to the increased scale of the merged company.

Both companies are
•currently underrated by the market
•on production growth paths
•generate positive media
The merged company will benefit from a board with international experience and industry expertise and an experienced and proven executive management team.  The merger offer has the unanimous support of the IBR Board. IBR directors will also join the new merged Board.

Iberian Resources will bring an outstanding Portfolio of Mineral Assets and a prime position in four of the world’s major gold/copper belts:

Punitaqui (Andean IOCG belt)
Hadleigh & Cornishman( Charters Towers Gold province)
Montemor (Iberian pyrite belt). Tenements totalling 1380 square kilometeres.
Mining here should produce an estimated 610,00 oz of gold  and should prove to be a realtively low cost project.
Lichkvaz (Tethyan Belt)  The focus on Armenia will continue, with the Lichkvaz Gold Project, now into production –Stage 1. This will substancially  increase cash flow.  This project has the potential for 100-150koz per year.

Tamaya resources will bring to the merger:
Requisite project building and operating skills, strong and proven turn-around skills,  international experience, senior management experience with international major companies. Tamaya has an outstanding gold and copper exploration portfolio.
It owns:
Ore bodies around Punitaqui.
The Cinabrio Mine.
The Amanto Copper Deposits.
Production at Tamaya has been growing quarter-on-quarter with no capital raisings required.
There is a further planned 140% increase in production by Dec 2007. Plant upgrades and mine expansions are planned.
Both companies should experience increasing production and growing cashflow by the end of 2007.  Debt funding is in place, so the companies have no capital raising requirements. Substantial cost savings will be delivered in 2007, after the merger of the two companies. Completion of the merger is expected by June 2007 and Implementation by June-July 2007.

The up and coming merger with Tamaya Resources Ltd implies a share price for Iberian Resources of A$1.04. The shares are trading well below this price at the moment.

Buy Iberian Resources up to A$0.90



Disclaimer: All the information above is provided as a service for individuals and institutions. It should in no way be construed as a recommendation as an investment. Investment decisions should be based on the risk tolerance and planning horizon of the investor. Market participants must understand that past performance is also not a guarantee or predictor of future results.