Myanmar Metals (MYL) released a Scoping Study for a starter pit in the China Lode of the Bawdwin Project (51% MYL). This 13 year, 250m deep starter pit provides compelling economics and would be the envy of most base metal projects globally. We estimate the 1.8Mtpa plant will produce 158ktpa Zn equivalent at minus ~US$0.45/lb payable Zn all-in sustaining costs (after credits) and generate average Revenue and EBITDA of US$395m and US$165m respectively (100% basis). It is important to note that the China Lode open pit consumes only 26% of the current resource. We believe the PFS (due Q1 2019) will incorporate additional open pits and underground mines from the neighbouring Shan and Meingtha lodes to produce a +25-year mine life. In addition, there is a high likelihood of further discoveries along the 8-10km of largely unexplored prospective strike in the Bawdwin Region. We maintain a SPEC BUY recommendation with a revised target price of $0.20/sh (from $0.22/sh).
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