Smallcaps.us Initiates Coverage of Esperanza Resources with $2.11 Price Target

Esperanza Resources Mexico map Cerro Jumil

Esperanza Resources' most advanced project is Cerro Jumil, a 100% owned silver/gold project in the state of Morelos, Mexico. Although the property already has a strong NI 43-101 compliant resource estimate, a new 15,000 meter drill program started in April to significantly expand the current gold resource.

We like Esperanza Resources (EPZ – $1.72) because the Company’s two most advanced projects have a strong NI 43-101 resource estimate with lots of potential for expansion.

EPZ’s 100% owned Cerro Jumil silver/gold property in Mexico has an NI 43-101 resource estimate with 935,000 gold equivalent ounces in the measured and indicated categories and 233,000 gold-equivalent ounces in the inferred category.

Furthermore, Esperanza owns close to 36% of Global Minerals Ltd., which is 100% owner of the Strieborná silver/copper/antimony property in Slovakia. The Strieborná NI 43-101 technical report includes 1.9 million tonnes (Measured and Indicated) grading 231.7 g/t silver, 1.1% copper, and 0.7% antimony and 1.5 million tonnes (Inferred) grading 180.0 g/t silver, 0.9% copper and 0.7% antimony. Both properties have lots of potential for expanding those estimates. Additionally, Esperanza owns several blue sky properties in Peru and Mexico.

Esperanza is also very well financed. As of March 31, 2011, it had close to $10 million in the bank and it expects to receive an additional $17 million in the coming weeks from the sale of its 30% stake in the San Luis property to Silver Standard Resources. This allows EPZ to conduct its exploration programs without having to raise additional money during the next twelve months.

Also, EPZ has a diverse management team with decades of experience. As I’ve written many times before, a good management team is vital in any young and fast growing Company. And this is the case at Esperanza. Mr. Bill Pincus, the Company’s President and CEO, oversaw the development of the 155-million-ounces Pirquitas silver deposit in Argentina. It has several skilled explorationists on board. Dr. Bartos is responsible for the discovery and development of San Bartolome, a 150 million ounces silver deposit in Bolivia. And Mr. Bond was instrumental in the discovery and exploration of the Pirquitas deposit.

Prices for gold, silver and other metals remain high. Although there may be some speculation in the metals market, we believe that the gradual rise of gold over the past 8 years indicates this is a solid trend that won’t see a strong reversal any time soon.

Conclusion

With interests in two advance-stage projects, a full treasury and an exciting exploration portfolio, Esperanza is well positioned for future growth and creating new opportunities to further enhance shareholder value. Based on peer comparison we initiate coverage of Esperanza Resources with a buy recommendation and a conservative price target of $2.11, or 40% higher than today’s 30-day average stock price. The target price has lots of potential for upward revision as additional results are announced.

Download your copy of the initial Esperanza Resources Company Report.

Download
For important disclosures, please read our disclaimer.
0 comments… add one

Leave a Comment