REY Resources Limited - PFS Positive for Coal Production

Rey Resources Limited (REY) has announced the results of the Duchess-Paradise Project Pre-Feasibility Study (PFS). The PFS highlights the opportunity for REY to commence surface mining at Duchess-Paradise to produce 2 Mt/a thermal coal for export to Asian markets. Capital and operating costs are estimated to be A$113M and A$60/t FOB respectively. REY will now complete a Definitive Feasibility Study (DFS) for the project which is likely to be finished late 2011. REY will also complete an 18,000 metre exploration drilling program in 2Q10 to the north of Paradise targeting additional near surface coal. REY’s cash balance of approximately A$14.5M should be sufficient to fund the DFS and drilling. The PFS numbers form the basis of BBY’s base case valuation and 12 month share price target of A$0.35/sh. We maintain our SPECULATIVE BUY recommendation.

BBY is an Australian focused stockbroking, corporate advisory and asset management firm. With offices in Sydney, Melbourne, UK and UAE along with a global presence in the USA and Asia, BBY is well positioned to service its clients’ local and global needs.

BBY’s primary objective is to be the leading Australian owned securities firm with a global platform, providing the right solutions to high growth, medium to large sized Australian Companies and their Investors. BBY is able to allocate significant resources to ensure we solve our client's problems by getting the best possible result in meeting their objective. BBY’s long term commitment to its clients is strongly supported by well-regarded research and experienced corporate finance and institutional broking teams.

For two consecutive years BBY research has key picked top performers. BBY picked in 2009 Extract Resources (EXT), the third best performing stock and in 2008 Linc Energy (LNC),the number one performer on the ASX/S&P200.

Established in 1987, and formerly known as Burdett, Buckeridge Young, BBY has developed a reputation for providing focused, quality services, innovative solutions and high level execution for its institutional, corporate and high-net-worth clients.

BBY is an independent Australian firm, with the strength of an international partnership with leading Asian investment bank CIMB-GK, (www.cimb.com), and an equity partnership with major US investment bank, Jefferies Inc (www.jefferies.com). 

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