Terra Studio research analyst J-François Bertincourt believes there a number of potential catalysts for a re-rating of junior explorer Iltani Resources (ASX:ILT).
The research note comes on the back of last week’s release of an initial exploration target of 74-100 million tonnes @ 55-65 grams per tonne (g/t) silver equivalent for the Orient West Prospect in north Queensland.
This includes a “high-grade” target of 20-24 million tonnes @ 110-120g/t silver equivalent.
Bertincourt says in his research note that those figures compare well with Terra Studio’s previous “back of the envelope” estimate of 32-44 million tonnes @ 80-120g/t silver equivalent.
“Going forward, ILT shall capitalise on the high-grade zones with resource infill and extensional drilling,” he says.
Bertincourt says Iltani’s exploration target ranks the Orient West Prospect around the midpoint of resources estimated for various deposits being developed by Iltani’s ASX-listed peers.
“The Orient West deposit is already significant in size and the high-grade core bodes well to define a mining inventory,” he says.
“There is also an opportunity to increase the size of the deposit with Orient East and Orient North.”
Iltani believes that Orient West, Orient East and Deadman Creek are all part of the same mineralising system.
“While good drill hole intercepts have already been reported at Orient East, those have not yet been considered for the exploration target at Orient,” Bertincourt says.
Terra Studio initially estimated Orient East could have an exploration target of 8-11 million tonnes, but has since revised that down to 4-8 million tonnes for the high-grade core.
Overall though, Bertincourt estimates the Orient Project could host more than 30 million tonnes of open pittable mining inventory at a silver equivalent grade in excess of 100g/t.
He says it makes sense for Iltani to focus future drilling programs on the high-grade core as it is the portion of the deposit that will most likely convert to a mineable inventory and an ore reserve.
But Iltani’s market capitalisation of $9.2 million and cash of $3 million, which gives it an enterprise value of just $6.2 million, rank the company at the bottom of its peers.
The next closest peer is polymetallic explorer Argent Minerals (ASX:ARD), which has a market value of $24 million and cash of $4 million.
“The currently low market valuation of ILT compared to its peers offers an excellent investment opportunity,” Bertincourt says.
“Additional positive drilling results as well as a JORC-compliant mineral resource estimate confirming the exploration target values should be catalyst for a re-rating.”
The Orient Project, which is an extensive precious metal-rich epithermal system with a possible intrusion (porphyry) at depth, shows strong similarities to the large Bolivian silver, lead, zinc, indium, tin systems, according to Bertincourt.
Orient, part of the Herberton Project, hosts multiple high-grade zinc-lead-silver-indium veins and stockworks outcropping over at least a 4 km2 area.
Iltani listed on the ASX in June 2023 after raising $5 million at $0.20 per share. Shares are currently trading at $0.22.
Terra Studio’s research note was sponsored by Iltani.
Write to Angela East at Mining.com.au
Images: Iltani Resources and Terra Studio
