{"id":6942,"date":"2024-03-10T22:29:05","date_gmt":"2024-03-10T22:29:05","guid":{"rendered":"https:\/\/economicherald.net\/?p=6942"},"modified":"2024-03-10T22:29:05","modified_gmt":"2024-03-10T22:29:05","slug":"drilling-proves-spartans-never-never-can-indeed-get-better-as-brokers-set-sky-high-share-price-targets","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=6942","title":{"rendered":"Drilling proves Spartan\u2019s Never Never can indeed get better as brokers set sky high share price targets"},"content":{"rendered":"<p>Canaccord Genuity believes Spartan\u2019s Never Never deposit could host +1.5Moz of gold<br \/>\nBroker anticipates first production could begin in 2H FY2025 and placed a speculative buy recommendation on the Simon Lawson-led company with a 75c price target<br \/>\nEuroz Hartleys is even more confident, suggesting more rich gold intersections could be coming from Never Never<br \/>\nIt has also issued a speculative buy recommendation with a more aggressive 90c price target<\/p>\n<p>\u00a0<\/p>\n<p><strong><em>Special Report:<\/em> Spurred on by the latest drilling results, which include multiple double-digit width and grade gold intersections, Canaccord Genuity believes Spartan Resources\u2019 Never Never deposit could grow to +1.5Moz in size.<\/strong><\/p>\n<p>\u00a0<\/p>\n<p>This confidence appears to be well-placed given the <a href=\"https:\/\/stockhead.com.au\/resources\/spartans-latest-11-55m-36-77g-t-gold-hit-expands-never-never-deposit-1km-down-dip\/\"><strong>top intersection<\/strong><\/a> of 11.55m @ 36.77g\/t gold in the latest drilling is not only the deepest to date, but also the third best gram X metre intersection seen at the deposit thus far.<\/p>\n<p>Ongoing drilling also expanded mineralisation at the Never Never deposit to ~830m vertical depth and ~1km down-dip of the current 952,000oz resource.<\/p>\n<p>Never Never already underpins growing resources at <a href=\"https:\/\/stockhead.com.au\/company\/spartan-resources-spr\/\"><strong>Spartan Resources\u2019 (ASX:SPR)<\/strong><\/a> flagship Dalgaranga project in WA\u2019s Murchison region and looms as integral to any plans to restart the existing carbon-in-leach processing facility located on-site.<\/p>\n<p>\u00a0<\/p>\n<h2><strong>Big growth potential<\/strong><\/h2>\n<p>Given the latest strong drill results, Canaccord attributed the potential for Never Never to grow to +1.5Moz to the broadening orebody and increasing grade at depth.<\/p>\n<p>\u201cWith the current underground resource averaging ~1,700ozpvm (ounces per vertical metre), assuming mineralisation extends ~200m below the current resource, equates to an additional 340,000oz,\u201d it noted.<\/p>\n<p>\u201cUsing the lower 150m (600mRL-750mRL) average of ~2,000ozpvm this increases to 400,000oz. We highlight this may prove conservative if grades continue to increase at depth.\u201d<\/p>\n<p>Small wonder then that Canaccord has rated SPR as a \u2018speculative buy\u2019 with a price target of 75c, well above the company\u2019s current price of 62c.<\/p>\n<p>This valuation is based on a base case production scenario using the Never Never open pit\/underground and Gilbey\u2019s open pit ore to support a 1.7Mtpa processing rate to produce 136,000oz per annum at an all-in sustaining cost of $1,616\/oz.<\/p>\n<p>\u201cWe currently assume first production in 2H FY2025, with Never Never underground accounting for 75% of the ounces produced over a seven-year mine life,\u201d it added.<\/p>\n<p>\u201cWe assume restart capex of $120 million, which incorporates a mill upgrade (addition of secondary crusher), pre-production underground development, paste plant and cutback on the Gilbey\u2019s pit.\u201d<\/p>\n<p>Canaccord added that while its assumptions would likely evolve as SPR moves towards a final investment decision, it was comfortable with the level of conservatism built in its valuation, particularly if additional underground mines are defined.<\/p>\n<p>\u00a0<\/p>\n<h2><strong>\u2018Just when you thought it couldn\u2019t get better\u2019<\/strong><\/h2>\n<p>If Canaccord is upbeat about the upside potential of SPR, Euroz Hartleys is downright ecstatic \u2013 noting that besides the deepest Never Never assay which also happened to be the third best intersection returned to date \u2013 another hole, DGRC1392-DT, had identified Never Never-like mineralisation over 35m.<\/p>\n<p>Notably, this has the same mineralisation description as the high-grade areas of DGDH 052 (4m @ 101g\/t gold), leading Euroz to ask if the best results were still to come.<\/p>\n<p>\u201cIt may be a geologist\u2019s dream to find a deposit like this, but it is a mining engineer\u2019s dream to mine it,\u201d Euroz said.<\/p>\n<p>\u201cSPR continue to find high-grade gold within 600m of the 3Mtpa Dalgaranga mill.<\/p>\n<p>\u201cWith minimal capital required to get the operation back into production($70-$100m), high grade feed (+2.2g\/t) and visibility this could be an asset capable of supporting a 10+ year mine life, we believe SPR is a compelling opportunity for gold investors.<\/p>\n<p>\u201cThis is the highest-grade gold story since BGL for a fraction of the price (and without the production risk).\u201d<\/p>\n<p>While maintaining its own \u2018speculative buy\u2019 recommendation, Euroz has gleefully increased its price target up from 70c to 90c per share, largely based on the opportunity to find more resources close to an existing mill.<\/p>\n<p>\u00a0<\/p>\n\n<p><span class=\"mce_SELRES_start\">\ufeff<\/span>\u00a0<\/p>\n<p><em>This article was developed in collaboration with Spartan Resources, a Stockhead advertiser at the time of publishing. <\/em><\/p>\n<p><em>\u00a0<\/em><\/p>\n<p><em>This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.<\/em><\/p>\n<p><span class=\"et_bloom_bottom_trigger\"><\/span><\/p>\n<p>The post <a href=\"https:\/\/stockhead.com.au\/resources\/drilling-proves-spartans-never-never-can-indeed-get-better-as-brokers-set-sky-high-share-price-targets\/\">Drilling proves Spartan\u2019s Never Never can indeed get better as brokers set sky high share price targets<\/a> appeared first on <a href=\"https:\/\/stockhead.com.au\/\">Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>Canaccord Genuity believes Spartan\u2019s Never Never deposit could host +1.5Moz of gold Broker anticipates first production could begin in 2H FY2025 and placed a speculative <a href=\"https:\/\/economicherald.net\/?p=6942\" class=\"read-more-link\">[more&#8230;]<\/a><\/p>\n","protected":false},"author":0,"featured_media":6943,"comment_status":"","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-6942","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - 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