East Asia is rated a SPECULATIVE BUY with a new 12-month target price of C$5.90
(rounded) (was C$4.00).

Event
The market has embraced the discovery of new gold mineralization associated with surface samples grading up to 1.78 g/t Au from the Moon River area, about 750 metres north of current drilling at the Main Miwah zone in Aceh province Sumatra, Indonesia. The company indicates that geology and geophysics appear to support some continuity of mineralization between Moon River and Main Miwah.
Impact : Positive
We view the preliminary identification of Au mineralization at Moon River as positive. An open extension of mineralization towards Moon River could significantly add an additional resource growth component to the Miwah area. While there is some validity in linking mineralization at Moon River and Miwah, these are early initial results and interpretations, and significant follow work is required to further support these conclusions. That being said, high profile speculative exploration drill plays like EAS's Miwah project can command market premium valuations as assets are delineated. We expect EAS shares could continue to be driven by speculative interpretations (no formal resources outlined) over the next several quarters as new results build on the size potential at Miwah and the surrounding area.
Valuation
We have modified our valuation for EAS accounting for a more aggressive speculative premium over the next 6-12 months. Given the relatively early stage of EAS's project portfolio (no formal mineral resource or economic study), we have based our valuation on an in situ gold methodology. We are maintaining our SPECULATIVE BUY rating on EAS and increasing our 12 month target to C$5.90 (was C$4.00).
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