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Resource Capital Research [RCR] - RCR abridged company review: Kimberley Metals
Limited, December 2009



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Resource Capital Research [RCR] - RCR abridged company review: Kimberley Metals Limited, December 2009

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RCR ABRIDGED COMPANY REVIEW
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KIMBERLEY METALS LIMITED, DECEMBER 2009

Please find a link to the abridged RCR company research report on Kimberley Metals Limited.

Kimberley Metals is expected to be listed on the ASX in January 2010 with the ASX code "KBL".

http://www.rcresearch.com.au/fdl?i=610


Proposed market debutant Kimberley Metals recently discovered high grade NSW gold resource should see the company in production and generating strong cash flow within 12 months.

This will provide drive to KBLs ambitions to develop a large scale lead-silver project in WA.

At the A$0.20 proposed IPO issue price stock looks undervalued relative to our assessed NAV of AS$0.39/share.


Key investment points:

* Our valuation is A$0.39/share (fully diluted) post IPO - (assumes A$15m raised in IPO).

* Expected initial high grade gold production will underpin longer term base metals value.

* Mineral Hill (NSW) 200ktpa processing plant in place - quick route to production within 12 months.

* Minimum 2.5 year initial high grade gold operation is expected to generate LOM projected cash (net of capex) ~A$45m.

High margins (year 1 opex ~US$200/oz).

* Cash generation from early proposed gold production is expected to provide leverage to value-adding and potential development of base metals operations.

* Mineral Hill gold operation is expected to be followed by high grade Cu/Pb/Zn operation at Parkers Hill.

* Sorby Hills (WA - lead-silver) is the flagship - potentially a major project (16.9mt Pb/Ag mineral resource, potential 1mtpa operation delivering 40ktpa contained Pb).

* Sorby Hills is well advanced - A$2.9bn gross in-ground metal value - extensive resource definition and PFS completed.

* Stock looks undervalued at A$0.20/share versus peer group base metals companies, (KBL A$10.20/t Pb-Equiv.

EV/resource ratio), due to KBL’s potential lower cost open pit operations and benefit of early gold cash flow.

* Predominant metal is lead, a star recent performer which has sound fundamentals, no longer the ugly duckling metal (current price US$2,376/t, up~140% in 12 months).

* Senior executives have extensive experience in base metals operations and project development.



Please refer to RCR for details of equity research coverage www.rcresearch.com.au or call +612 9252 9405.

Resource Capital Research provides equity research for junior and developing resource companies - typically those with a market value of less than $200m, though up to several billion dollars, with a focus on the gold, uranium, iron ore and tin/tungsten sectors.

We provide company research reports for investors and companies.

RCR also offers mining companies additional financial services.

Read more on RCR: http://www.rcresearch.com.au

Financial Services Guide
http://www.rcresearch.com.au/financial-services-guide



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