Steven Ralston, CFA
Today, we initiate coverage of Pelangio Exploration (PGXPF:OTCBB) and (PX: TSXV), with an Outperform rating. Pelangio is a Toronto-based junior gold exploration company proceeding with drilling programs in Ghana, where the company has two properties: Manfo and Obuasi. Very encouraging positive assay results from the first Manfo drilling program, which were announced in September and October, significantly increased shareholder value with the stock rallying from $0.41 to over $1.00. Notably high-grade intersections of ~8 g/t gold over 12 meter intervals were discovered. Additionally, the first drilling program indicates there may be bulk tonnage potential along a minimum 500-meter strike length. Results from the second phase drilling program totaling over 5,000 meters could potentially increase the stock’s valuation even further. Furthermore, management plans on implementing a second phase 5,000 meter drilling program on the company’s Obuasi property in early 2011. Our initial target is $1.25.
For a copy of the full research report, please email scr@zacks.com with Pelangio as the title.
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