The Conversation (0)
Description
Positive progress on the development of Ora Gold’s (ASX:OAU) Crown Prince project is a key factor in Argonaut Securities’ recent equity research report issuing a speculative buy recommendation for Ora Gold.
“OAU is making steady progress on its Crown Prince development targeting first production towards the middle of next year. Once in production, we expect Crown Prince to be a high-margin, open-pit operation with a ~2-year mine-life,” the report said,
The report also noted the potential for extending the mine life given recent “encouraging exploration results” at Crown Prince.
“We make a slight price target increase to $0.019 ($0.018 prior) and maintain our speculative buy recommendation,” the report said. The valuation is modeled based on Ora Gold entering production in the second quarter of 2026, with a small but high-grade open pit mine returning cash flows.
Crown Prince (JORC 2012) Mineral Resource Estimate
The project’s prospects are further de-risked by the ore purchase agreement with Westgold (ASX:WGX), the report said.
Key Highlights:
- Diamond drilling for geotechnical studies is currently underway to finalise the open pit designs for Crown Prince. Environmental studies have been completed and metallurgy work indicates excellent free milling material with total recoveries ranging between 98 to 99 percent.
- OAU plans to submit a mining proposal to DEMIRS mid to late H2 of CY2024. OAU’s cash position totalling AU$7 million is expected to fund development work up to a decision to mine. Pre-production capex and working capital requirements for Crown Prince is AU$15 million.
- An updated mineral resource estimate (MRE) is expected in October 2024. Current MRE totals 240 koz at 4.1 g/t gold with 67 percent in the indicated category.
- Despite its relatively small production size, Crown Prince is one of the highest margin development projects, with a resource that includes 164 koz shallow high-grade (5.2 g/t gold) ounces, driving a compelling economics.
For the full analyst report, click here.
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