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Solid Resources (SRW.V) - a promising 'conflict-free' tantalum source for Europe

Full Report by Objective Capital , Sep 26, 2011 download full report
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Key Points:

  • The Doade-Presqueiras property is Solid’s flagship project
    Solid’s management is focused on exploration and development of its 100‑percent‑owned Doade‑Presqueiras property in northwestern Spain. The company’s optimism is based on historic tin mining that took place on the property and more recent drilling assays that show encouraging quantities of rare metals, notably tantalum, lithium, niobium and rubidium.

  • A significant drilling programme now completed
    Solid commenced drilling early this year at Doade‑Presqueiras with the intent of completing 29 holes for 3,500 metres. The drilling was to target a northern zone with 16 infill holes, with 13 holes planned for the southern portion of the property. This programme was subsequently increased to 31 holes based on an unexpected and highly encouraging assay obtained from the northern zone. Metallurgical work is currently under way and should be complete in November.

  • Assays to date have returned significant values of tantalum, tin and rare metals
    Solid now has assays for 18 holes drilled this year into the northern mineralised zone at Doade‑Presqueiras, and for 13 holes targeting the southern mineralised zone. Drilling this year suggests the deposit is considerably larger than previously believed. Assays have been significantly higher than in earlier drilling. Local values within the north zone range as high as 207 parts per million (ppm) tantalum, with potential continuity between all areas and with thicknesses of up to 11.5 metres. High-grade mineralisation in the most southern zone, known as Taboazas, has averaged 256 ppm tantalum, 1,216 ppm tin, 0.98% lithium and 167 ppm niobium.

  • Tantalum is the emerging story at Doade-Presqueiras
    Tantalum is a strategic metal, vital for the manufacture of most electronic devices, such as capacitors, cellular telephones, and computers, and without a viable substitute. A substantial proportion of global supply comes from politically troubled areas and a supply shortfall has sparked a significant price increase recently. Development of a “conflict-free” mine in Spain could ease concerns over the source of supplies – particularly in the consumer electronics industry.

  • Solid also has an early stage copper-gold prospect under option in Peru
    Last year, Solid acquired an option to earn a 100-percent interest in an early stage copper and gold prospect in northwestern Peru. Grab samples have returned anomalous values of gold and copper, ranging as high as 30 grammes of gold per tonne and 1.0 percent copper.

  • Solid has recently completed a C$1m financing to further its exploration in Spain and Peru
    Solid’s management has successfully raised C$1m through a private placement of 10 million shares at C$0.10. Further, the company has a considerable quantity of options and warrants outstanding that could provide several million dollars in a rising market.

  • Valuation of Solid yields a base-case valuation of C$0.21 per share
    Our assessment of Solid Resources and its Doade-Presqueiras project, based on reasonable probabilities of exploration success, yields a base-case valuation of C$0.21. Assuming success at all stages of future exploration and development, our assessment would increase to C$0.39, and with more optimistic assumptions, to C$0.83.

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