De Grey Mining (DEG.ASX) | Price = 5.0c | Target = 25c | Over 800koz in Resources=3B DEG now a developer

DEG Acquired Indee for Deferred Payment

Indee is contiguous with DEG�s Turner River tenements

DEG now has over 800koz in Resources, grading 1.5g/t.

DEG � now a project developer.

Beer & Co.�s risked valuation is 25c/share

Beer & Co has a Strong BUY rating; Very High Risk

De Grey Mining

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On 8 February 2017, DEG announced acquisition of the Indee gold project.

The consideration is an initial payment of $50k, plus a further $50k within 3 months, with the balance of $15m to be paid by August 2018. In addition, DEG is required to spend $0.6m on the tenements.

In Beer & Co.�s view, the timing of the payment of $15m means it can be part of the project financing, rather than requiring significant equity at this time.

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Indee straddles the Mallina Shear, giving DEG over 100km of continuous strike. DEG is able to develop the previously separate projects as a single development, with multiple ore sources.

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DEG now has nearly 10Mt in Measured + Indicated Resources, for a total of nearly 500koz, at an average grade of 1.6g/t, within a total of over 800koz, in more than 16Mt.

There is significant further mineralisation not yet included in Resources.

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Beer & Co expects a series of Resource upgrades over the balance of 2017, along with results of a scoping study and then a FS by then end of 2017.

The volume, grade and nature of mineralisation gives us confidence.

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Beer & Co has modelled DEG based on developing Indee � Turner River as a single project, at a rate of 2.0Mt/yr. Beer & Co has estimated capital costs from similar projects and we have estimated operating cost using our database, cross-checked with other public data.

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Beer & Co.�s valuation is many times the share price. There is significant upside to our valuation, but it is based on our estimates.

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Beer&Co.
ACN 158 837 186
Authorised representative Melbourne Venture Securities Pty Ltd
www.beerandco.com.au

Author:
Pieter Bruinstroop
pbruinstroop@beerandco.com.au

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