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MENAFN - ProactiveInvestors - Australia - 18/11/2012

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(MENAFN - ProactiveInvestors - Australia) Kasbah Resources (ASX: KAS) has received a Buy recommendation from Hartleys with a Price Target of 0.37, which is more than double the last traded price of 0.17.

The following is an extract from the report.

First Bou El Jaj Drill Results Expected Soon

Kasbah Resources commenced with first-pass exploration drilling at the Bou El Jaj (BLJ) Tin Project in Morocco back in September, with first results expected in the coming weeks.

Kasbah reached agreement to purchase 100%-interest in the two exploration permits that make up the BLJ project in late 2011, with the permits transferred to Kasbah in March 2012.

The permits lie within the south-western extent of a broad zone of tourmaline alteration which contains strong geochemical signatures for tin, and are located some 15km by road of the Company's main Achmmach project.

Kasbah is planning to complete 5,000m of diamond drilling at BLJ over four tin prospects, testing for shallow (<200m) tin mineralisation which potentially could build into a mineable resource extractable via open pit mining methods and trucked a short distance to processing facilities at Achmmach (once developed).

We see the potential addition of shallow, good-grade ore from BLJ as having strong benefits for Achmmach, providing opportunities to increase mill throughputs and/or mill head grades while adding to project mine life. The prospects to be drilled contain outcropping high-grade tin mineralisation, part of the Ain Karma Trend.

High-grade Tin Mineralisation at Surface Offers Upside

Kasbah has already defined and mapped outcropping tin mineralisation (grades up to 17.9% Sn) along 2.1km of strike within prospective tourmaline-altered host-rocks that extend over 3.5km (part of the Ain Karma Trend).

Based on the exposure of tin mineralisation defined to date, Kasbah has a conceptual mineralised target (non-JORC) of 2-4Mt at an average grade of 0.7-1.0% Sn for 14K-40Kt of contained tin within the BLJ Project.

Four prospects (Gallery Hill, Grand Crete, Ain Karma and Hill 982) will be drilled in the current drill campaign, with the drilling of Gallery Hill and Grand Crete now nearing completion.

The Company expects to drill the remaining prospects before the end of the year and currently has 3 diamond rigs on site. First assay results are expected to be received in November.

Achmmach Infill Drilling Upgrading the Inferred Resource

In addition to the exploration drilling at the BLJ Project, Kasbah continues with the resource drill-out at Achmmach, which is currently estimated at 14.6Mt at a grade of 0.9% Sn for 135Kt of contained tin, over 1.6km of strike of the 2km Meknes Trend.

The current drill program is focused on the upgrade of Inferred Resources to Indicated Resources and the Company still has over 400m of prospective strike along the Meknes Trend to drill-test.

On the current schedule Kasbah expects to release the next resource update for Achmmach in Q1 CY2013. Results for the next two drill sections (2810mE and 3300mE) are expected before the end of the month.

Kasbah remains our top pick in the tin space, offering exposure to a near-term development project with considerable near-mine and regional exploration upside for resource growth/mine life extensions.

The current tin price, though volatile has stabilised above 20,000/t and our longer term view remains unchanged for improved prices. We move to a Speculative Buy recommendation on Kasbah, with a valuation of 30cps with 12-month price target of 37cps.


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