Since GE&CR initiated coverage of Metallum in March 2010 the company has renewed all of its exploration/prospecting licences which were due to expire, has signed agreements with the local land owner in Scotland ahead of its drilling programme, appointed Kevin Lynn as Finance Director and laid the path to its PLUS IPO. In addition, a matched bargaining facility was established in March with JP Jenkins (owned by GECR's parent RSH) to provide a means for Metallum's existing shareholders to trade their unlisted shares.

Metallum holds a total of 31 exploration/prospecting licences in Northern Ireland, the Republic of Ireland and Scotland. The Scottish Fore Burn licence is the most advanced (previously drilled by RTZ) and will be the subject of an infill drilling programme to define a resource from the funds raised by the company's PLUS IPO. Access agreements with the two relevant landowners have been executed. One licence in Northern Ireland has revealed outcropping of lead and zinc veins and, funds permitting, will also see the presence of a drill rig.

Kevin Lynn is currently the company secretary of ASX listed Silver Mines Limited, Uranium Exploration Australia Limited and dual PLUS listed Hill End Gold Limited, as well as a chartered accountant and Master of Finance with 15 years of industry and resource sector experience. Lynn joins existing directors Neill Arthur, Ian Mutton and Per Wimmer on the Metallum board.

The attraction of Metallum is that the company has assembled a select group of highly prospective licences on the back of its and the BGS's analysis of the UK government's TELLUS £6.5 million data package. The company is yet to define a resource, but with a listing on PLUS and first results from Fore Burn's drill programme expected in the fourth quarter, any positive news would be expected to see a significant re-rating of the stock. As the company works towards the definition of a resource, further price appreciation should be expected. For investors looking to invest in a local UK gold company with low country risk at the beginning of its stock market life, Metallum is worthy of our speculative buy recommendation.

* Metallum is a corporate client of RSH, the parent company of GE&CR. Tom Winnifrith, RSH's CEO, owns shares in Metallum as does the SF t1ps Smaller Companies Gold Fund , an investment vehicle managed by RSH.

This research note cannot be regarded as impartial as GE&CR has been commissioned to produce it by Metallum*, it should be regarded as a marketing communication.

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