Exco Resources Ltd (ASX:EXS) announced in its quarterly report for the period to end-June 2009 that it achieved its interim goal of over 25 million tonnes of indicated resources within the Cloncurry copper project, as the basis for the definitive feasibility study.
Indicated resources at Cloncurry in Queensland increased by 22 percent to 28.0 million tonnes grading 0.91 percent copper and 0.25 grams per ton of gold, as announced earlier in July.
At its White Dam gold project in South Australia, preliminary site works have started with a view to first gold production in early 2010. Exco and Polymetals Group Pty Ltd in June completed the formalities of their production joint venture agreement for White Dam in June. Polymetals has acquired a 25 percent interest and will operate the project.
At the end of the June quarter, Exco had A$10.8 million in cash, which ensures that it will remain adequately funded for both its equity commitments in respect of the White Dam project and its other key objectives for the foreseeable future, it added.
Fox-Davies Capital issued a note on Exco, retaining its ‘buy’ recommendation, with a target price slightly reduced to A$0.55 per share from a previous A$0.58.
The broker called the increase of the indicated resources at Cloncurry an important milestone for the project. It believes this latest resource upgrade will provide added confidence that there is sufficient ore to form the basis for a 25 to 30 million tonnes mineable reserve which will be capable of sustaining a 2.5-3 million tonnes per annum operation over a 10 year mine life.
”It is expected that the Cloncurry resource base will be increased in the future. The next step will be to submit the Environmental Impact Statement (EIS) in pursuit of the relevant approvals for the project, which we expect very shortly,” FD Capital said.