Emerging Gold Producer at the Right Time - Gascoyne Resources (ASX: GCY)

With A$ gold prices continuing their strong 15-year run, it's interesting that there are relatively few new gold sector production opportunities of reasonable scale available to investors at the present time. Most budding gold hopefuls have already made the transition to production status over recent years, with the balance having annual production ambitions of relatively modest scale. Gascoyne Resources (ASX: GCY) is an interesting proposition because it is a budding gold producer that does offer scale - and just as importantly - profitability. The stock has already risen by around 250% in share price terms since we initiated coverage almost exactly a year ago, but further gains are on offer as its project is further de-risked. The company's 100%-owned Dalgaranga Gold Project in WA hosts a combined Resource comprising 25.7 Mt @ 1.4 g/t gold for 1.12Moz of contained gold. The project boasts a Pre-tax NPV8 of A$177 million and IRR of 65%, based on a A$1,600 gold price over six years. The estimated LOM Operating Cash Cost (C1) is A$869/oz and estimated LOM all-in sustaining cost (AISC) is A$931/oz.

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Gavin Wendt
Founding Director

Gavin has been a senior resources analyst following the mining and energy sectors for the past 25 years, working with Intersuisse and Fat Prophets. He is also the Executive Director, Mining & Metals with Independent Investment Research (IIR).

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