Geovic Mining (TSX:GMC) Stepping Out onto the Mada Deposit

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By Research Reports - Posted on 02 July 2008

Malcolm Bucholtz B.Sc, MBA Analyst

Trading Note

Mada ? The Second of Seven Deposits

In our initiation report dated May 24, 2008, we noted that Geovic had been focused on its 8 sq. km Nkamouna deposit (first of seven deposits) and that consulting firm Pincock Allen & Holt had pegged Nkamouna's proven and probable ore reserves at 54.7 million tonnes grading 0.25% Cobalt, 0.69% Nickel and 1.33% Manganese for contained metal quantities of 299 million pounds Cobalt and 829 million pounds Nickel.

This past week Geovic Mining announced that it has been diligently working on the Mada deposit (second of seven) which adjoins the Nkamouna deposit to the north. The Mada deposit is of considerable interest because in 2006 Pincock, Allen & Holt identified a 43-101 compliant inferred resource estimate on the deposit of 145 million tonnes grading 0.21 % cobalt, 0.48% nickel, and 1.15% manganese. This estimate was not based on drilling but rather on hand dug pits averaging 13 meters deep that did not even penetrate the entire Mada mineral zone due to the high water table.

So far in 2008, Geovic has completed in excess of 1,255 drill holes and pits within the 59-square kilometer Mada mineralized area. Approximately 16% of the new Mada drill holes, encompassing more than 3,500 samples, are awaiting analysis at a commercial assay lab. An additional 5,000 samples are being prepared for shipment from Cameroon. Upon receipt of these assay results in the coming months, the Company will highlight them in press releases. By year-end, Geovic plans to use these results as the basis for new NI 43-101 compliant ore reserve/resource calculations.

Initial capex to get just the Nkamouna deposit up and producing is pegged at $397 million and the construction period is estimated at 24 months. Using a base case of $20/lb Cobalt and $11/lb Nickel shows that Nkamouna will generate an after tax NPV of $555 million at a 10% discount rate and $695 million at an 8% discount rate. Using these base case prices, capex payback will occur in 2.9 years. All in all, Nkamouna is a very compelling mining story. Now Geovic sits poised to expand the project economics and really make heads turn. As news start to flow over the coming months from the Mada drilling, the markets will most certainly be paying attention.

At The Market Traders, we to shall be paying close attention. In our initial report of May 24, 2008 we applied some rudimentary valuation mechanics and concluded that Geovic had the potential to reach the $5 level. This approach corresponded well with the NPV figures identified for the project by Pincock Allen Holt. It shall be very interesting to see just how much the additional resource at Mada enhances the economics.

We maintain our position that Geovic is currently trading at a level that does not even come close to reflecting the true value of what it is sitting on in Cameroon.

Geovic trades on the Toronto Stock Exchange under the ticker GMC. Company management is now also seeking to obtain a listing on the OTC BB market. For further information, be sure to visit the Geovic website at www.geovic.net or call Andrew Hoffman ? VP Investor Relations at Geovic at 720-350-4130.

Andrew C. Hoffman, CFA

V.P., Investor Relations

Geovic Mining Corp.

Direct       (720) 350-4130

Toll-Free (888) 350-4130

ahoffman@geovic.net