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ABID - Colt Resources - Due Diligence and Valuation Report




Arrowhead BID


11 Sep 2012





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Colt Resources Inc. (Colt) is a Canadian junior exploration company engaged in exploring and developing mineral properties with an emphasis on gold and tungsten projects that have potential to produce within two to three years. Colt is the second largest lease holder of mineral concessions in Portugal (with five key projects including its flagships Boa Fé Gold project, located in southern Portugal, and its Tabuaço Tungsten project in the Armamar-Meda Concession), and owns interest in some secondary projects in Canada. Colt is currently focused on its advanced stage exploration projects in Portugal. The Boa Fé Gold project on the one hand is at an advanced stage of development with production expected by 2015. The Tabuaço Tungsten project on the other hand is being fast tracked towards pre-feasibility by Q2 2013 and to production by 2015. Colt recently announced final analytical results for its ongoing drilling program at the Tabuaco deposit intersecting 0.88% WO3 over 10.34m including 1.09% WO3 over 2.82m. Colt also released the results corresponding to recently completed drill holes at the ongoing drilling and trenching campaign on its Boa Fé gold project. The latest results show intersection of 2.63g/t Au over 44.78m, including 8.19g/t Au over 9.65m. Initial NI 43-101 resource estimate was released for the tungsten and gold projects in November 2011 and July 2012, respectively. The gold project shows Indicated Resources at 4.23MMT grading 1.57 g/t gold and Inferred Resources at 0.21MMT grading 2.36 g/t. While for the Tungsten project, the Indicated resources total 760kt@0.58% WO3 and Inferred resources total 1,330kt@0.57% WO3. There is an upside to the potential mineralization of the project with discovery of Aveleira tungsten deposit; considered to be similar to the Tabuaco deposit. In August 2012, Colt received final analytical results for five drill holes at the Monfurado gold deposit, located within the Montemor exploration concession. The results demonstrate near surface gold mineralization with two of the drill holes intersecting 5.31g/t Au over 7.56m and 2.80g/t Au over 10.08m. In May 2012, Colt privately placed its 10MM common shares at a price of CA$0.50 per share, for gross proceeds of CA$5MM and a non-brokered private placement of 7.4MM shares to European investors at a price of CA$0.50 per share, for gross proceeds of CA$3.7MM. Colt is focused on bringing these projects to feasibility level by 2013. Positive market dynamics in both the tungsten and gold markets for different reasons, and strategic government relationships are major positives for Colt’s prospects. Colt’s board and management are composed of a balance of financial and technical profiles, which is necessary in the relatively complex scoping, and processing of gold and tungsten ores. Given due diligence and valuation estimations based on intrinsic revenue capacity of existing assets, Arrowhead puts the company’s fair share value in the CA$0.49 and CA$1.61 bracket.

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