Its share price has already soared 255 per cent, but one fund manager says this mining stock “is the cheapest cash generator we can find.”

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ASX:NCZ

In its May report, the Chester High Conviction Fund says New Century Resources Ltd (ASX:NCZ) remains “the cheapest cash generator we can find.”

New Century continues strong progress toward restarting of operations at the Century Zinc Mine in Queensland, with refurbishment activities on budget and schedule. According to the company, the project remains on track for commissioning in July & first production in August 2018.

Source: Company filings

New Century Resources are aiming to become one of the top 10 zinc producers in the world and also in the lowest cost quartile globally.

In early May the company completed a $40 million equity raising at $1.15 per share to fully fund the project into cashflow.

100% upside

In a January 2018 presentation, New Century Resources said it was targeting production ramp up to 500ktpa zinc concentrate with free cash flow of A$1.76 Billion (at zinc price US$1.25/lb) over an initial 6.3 year mine life from the Century Tailings Deposit, with additional in-situ resources for potential mine life and metal production expansion.

According to Kitco, the current zinc price is US$1.43/lb.

With New Century Resources shares trading at $1.35, this compares favourably with the $640 million market capitalisation of the company.

The Chester High Conviction Fund says New Century starts producing zinc in 8 weeks “with 100% upside to our valuation.”

Since it was reinstated to trading in July last year, the New Century Resources share price has jumped from 38 cents to $1.35, a gain of 255 per cent.

Contributors to this article may own shares in some of the companies mentioned in this article. The Capital Club has a thorough disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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Bruce Jackson has 30 years of hands on investing experience. He is passionate about stock market investing, running his own portfolio and SMSF. His focus is on small cap growth stocks. You can contact Bruce at brucej@thecapitalclub.com.au