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RESOURCE COMPANY RESEARCH [RCR] - RCR - COMPANY UPDATE - MINERA GOLD (ASX:MIZ), 17 FEBRUARY 2015





Fortbridge Media Release

Resource Company Research [RCR] - RCR - Company Update - Minera Gold (ASX:MIZ), 17 February 2015

Resource Capital Research has released its latest report covering Minera Gold

Investment Points

* The 4Q14 purchase of the San Santiago copper and gold plant has transformed MIZ into a toll-treatment operator with a captive group of local miners and margins of US dollar 300 per ounce Au for toll treatment

* Government formalization of the small mining sector prohibits mercury use, pushing small gold miners to registered processing plants � an opportunity for MIZ to follow the path of established TSX toll-treater Dynacor.

* MIZ has plans to recommission the copper oxide circuit, which (with gold and sulphide Cu) would provide a third revenue stream to the San Santiago plant. Cu is expected to provide an important revenue source in addition to gold.

* MIZ signed new contracts with third parties for high grade Au supply to San Santiago, and is in discussions with 3rd party Cu oxide suppliers. Revolving credit line obtained to finance ore supply for the plant.

* SilverStream (royalty company shareholder) has gold streaming on 10 percent of gold production from the CIL and 100 percent of the silver in the copper concentrate. They have to date provided US dollar 6.0M for the San Santiago plant purchase and working capital from a US dollar 9.5M commitment.

* Torrecillas and San Santiago (both 100 percent owned) mining approvals in place. Permission pending to increase milling rate from 350 to 700tpd, with construction of an expanded tailings dam to accompany increased processing.

* 1,400ha is under evaluation for future copper production at San Santiago, with prioritised production from the Brazil then Decimo Quinto in 2015. Potential to add additional production from unexploited veins at Torrecillas.

* Cost reduction with San Santiago acquisition. Lack of working capital and throughput resulted in 882 dollars per ounce all in costs for 4Q14, while ramping production up to ~1600oz/month for March 2015, targeting 2000oz/month by April and meeting all milestones for the final US dollar 3.5M from SilverStream during 2015.

* MIZ investment case is supported by processing of high grade Au and Cu veins from in-house resources and toll treatment, plus potential for larger discoveries longer term at Tumi and San Santiago through self-funded exploration.

* RCR valuation 1 cent for San Santiago 350tpd production with risk adjusted valuation increasing to 3 cents per share with 700tpd production and project de-risking.

For a complete copy of the research, please click on the link below

For further inquiry, please contact RCR on +61 2 9439 1919.




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