On Monday, UBS maintained its Buy rating on De Grey Mining Ltd (DEG:AU) with a price target of AUD2.20. The firm acknowledged the early-stage results from the Hemi Gold project, which suggest the potential for underground mining. These findings hint at production rates of 200-250 thousand ounces per annum (kozpa), based on high-level estimates of 4-5 million tonnes per annum (mtpa).
The analyst from UBS highlighted the additional value that could arise from expanding the current production rate and extending the mine's life. The preliminary results do not include financial details but serve as a reminder of the project's versatility beyond the last Detailed Feasibility Study (DFS). The current DFS plans indicate an initial 12-year production of approximately 530kozpa.
The exploration and study phase to integrate these new findings with the existing DFS will likely span several years. The analyst noted that the 0.119 ratio of the recommended scheme aligns with UBS's 0.115 ratio based on their price targets for Northern Star Resources Ltd (ASX:NST) at $19.05 per share and De Grey Mining at $2.20 per share.
Furthermore, UBS believes that the absolute price of De Grey Mining's shares leaves room for competitive bids, which may include partial cash offers. This commentary underscores the firm's continued positive outlook on De Grey Mining's stock.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.