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Analyst Actions: New Millennium Iron Keeps Neutral Rating, $1.85 Target at Credit Suisse

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Credit Suisse says: "NML.TO released drill results yesterday for the Howells Lake property. We see potential for a 6bt resource here (equivalent to about four Alderons), but the stock closed flat. For contrast; Alderon announced a MOU with Labrador City and Wabush on the same day, and the stock closed up over 6%. The market wants to see delivery, not exploration.

"Going forward, we are likely to see a lot less exploration drilling from NML.TO. Exploration expenditure over the next few years will likely only be the minimum necessary to keep control of its tenements - perhaps $1mn p.a. The company understands that exploration isn't adding value anymore - investors want to see delivery.

"2013 is a very busy year for NML.TO as it moves into delivery mode. In JunQ13 alone we should see i) commercial terms agreed for pricing of the DSO/hematite material, ii) an updated Feasibility Study for KeMag/LabMag (which starts the clock on Tata for its development commitment), and iii) clarity on the infrastructure arrangements for the 2H2013 start up of the DSO/hematite project.

"Comparable projects/deposits to Howells Lake currently trade at around $0.05 per contained Fe tonne. Based on a) our 6bt / 30% Fe estimate and b) NML.TO's 80% interest in the deposit, the comps value Howells Lake at around $72mn or $0.40 per NML.TO share. We already have $1.12/sh worth of 'non-project resource potential' in our target price, but the equity market currently values this at closer to $0.00/sh."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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