De Grey Mining (DEG.ASX) | Price = 6.9c | Target = 22.5c | Over 1.0Moz in Resources=3B More to come=3B Scoping stud by 24hgold

DEG upgraded Resources from Indee, from 345koz to 538koz

DEG now has over 1.0Mz in Resources at Indee-Turner River.

Beer & Co expects further upgrades to DEG�s Resource estimate.

Scoping Study results expected end May.

Beer & Co.�s risked valuation is revised to 22.5c/share

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

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When announcing the acquisition of a binding 12-month option on Indee in February 2017, DEG announced a Mineral Resource Estimate of 6.66Mt grading 1.6g/t for 345koz in JORC 2004 Resources, of which 267koz was in Measured + Indicated (M+I) categories.

On 3 April, DEG announced an update of the Resource estimate to JORC 2012 standard, incorporating the vendor�s drilling, of 9.15Mt at 1.8g/t for 538koz.

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DEG�s resource estimate for Turner River remains 464koz from 9.7Mt grading 1.5g/t. In total, DEG now has over 1.0Moz, from nearly 19Mt grading 1.7g/t, from 100km of the Mallina Shear and 60km of the Tabba Tabba thrust.

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DEG has areas, such as Towerana and Mallina, that require further drilling to bring into Resources. DEG also has identified many more prospective areas.

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DEG advised in their 3 April announcement that the results of a scoping study are expected by late May.

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Beer & Co models DEG as processing 2.0Mt/yr at an average diluted grade of 1.54g/t, compared with the Resource grade of 1.65g/t, producing about 90koz/yr at an average all-in cost, after project capital, of $A 900/oz.

Beer & Co.�s valuation has been revised to 22.5c/share, with the mine life extended by 4 years, from 9 to 13 years, and first gold in early 2019. We also allow for higher capital and operating costs due to the fresh ore which is now clearly delineated.

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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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Beer & Co.�s risked valuation, based on a gold price of US$ 1250/oz, is a multiple of the current share price.

There is significant upside to our valuation, but it is based on our estimates.

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