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VSA Capital Market Movers - Metal Tiger, Sula Iron and Gold PLC

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Metal Tiger (LON:MTR)

Metal Tiger (MTR LN) has announced an update on its 30% owned T3 copper project in Botswana. Assay results from geotechnical drilling using wide diameter holes are encouraging and confirm the initial pit design whilst wide intersections such as 46.6m at 2.1% Cu and 6g/t Ag may benefit the resource update due in July 2017. These wide holes are primarily to determine a greater understanding of rock strength and stability as well as to provide samples for metallurgical testing, further drilling will seek to determine the potential for an expanded pit design.

MTR has stated that it expects the remaining assays from Zone 2 drilling to be returned by the end of June. A resource update is due in July 2017 covering Zones 1 and 2 although further drilling is also due to take place on nearby anomalies at the same time. In August drilling will focus on Zone 3, below the current T3 resource while in Q3 2017 the company aims to complete metallurgical, mining and processing testwork for the PFS.

We reiterate our Buy recommendation and 4p target price.

Sula Iron & Gold (LON:SULA)

Sula Iron and Gold (SULA LN) has announced that its Phase three drilling programme has commenced. The new programme is for 5,000m and will again be carried out by Equity Drilling. The focus of this drilling will follow up on the promising results from Sanama Hill as well as the Southern Target TZ4 where the initial scout hole yielded 5.2g/t over 1.2m.

The final assay results from the recent programme have now been received. The second scout hole at TZ4 also returned mineralisation with two intervals of 0.8m at 1.59g/t and 1.79g/t. At Sanama Hill hole FDD020 hit intervals of 1.3m and 1.8m at 0.97g/t and 1.48g/t respectively and in total 10 of the 14 holes at Sanama Hill returned mineralisation with an average 2.05m at 3.9g/t (average true thickness and length weighted grade).

Sula has also announced that a detailed structural review of the local geology has been carried out resulting in the identification of a total of 19 target zones including Sanama Hill and the Southern Target which includes TZ4. Given the recent results we believe that a stronger understanding of the structural geology will significantly benefit future drill targeting and enable Sula to capitalise on this drilling programme which demonstrated the potential at Ferensola for multiple zones of gold mineralisation as well as thick mineralised structures.

We reiterate our Speculative Buy recommendation and target price of 1.6p/sh.


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