The broker introduced a “speculative buy” rating on Great Bear and increased its target price to C $ 27 from C $ 22 previously.
Stifel GMP raised its price target on () following a site visit to its flagship Dixie gold project in the Red Lake District of Ontario.
The broker introduced a “speculative buy” rating on Great Bear and increased its target price to C $ 27 from C $ 22 previously. Stifel said he is also moving to a discounted cash flow (DCF) assessment for Great Bear after better understanding the development potential of the project.
“Overall, we think Dixie is a gold project that will be built, has too many positive attributes for serious and committed companies in the industry to ignore, and if Great Bear is not the ultimate owner, a Third party bidder for the company and the project will eventually emerge, ”Stifel analysts said in a note to clients.
“As previously stated, we believe that Dixie’s grade, tonnage (size), location and, most importantly, flexibility to develop and operate, create valuable options for any gold miner seeking to generate high margins and a quick return on investment. For these reasons, we believe Dixie has attractive attributes that most other projects just don’t have, ”they added.
READ: Great Bear Resources says ongoing drill program ‘dramatically expands gold mineralization’
Great Bear released the results of its 2021 fully-funded, ongoing 2021 exploration program at Dixie on October 4, 2021. The program includes seven new drill holes that are representative of the deeper mineralization of the LP Fault on a large area 1.4 kilometers (km) in lateral length. between approximately 450 and 750 meters (m) downhole depth.
In the future, deeper drilling will continue for an additional 2.6 km during phase 2 of the current program.
Great Bear has now reported 446 LP Fault drill holes for 300,000 meters of drilling on the Dixie property. The company plans to continue with expansion Phase II drilling in hopes of significantly expanding the extent of gold mineralization confirmed by drilling at the LP fault by the end of 2022.
Stifel analysts noted that grade, size, location, long life, and development and exploitation options combine to create the potential of a core asset, with high margins, in a coveted jurisdiction.
They said they “strongly” expected Dixie to be a deposit of over 10 million ounces (Moz). With a strike length of more than 4 km, drilling of up to 400 m and more regularly reaching expected and predictable mineralization, high-grade and coherent domains in a much larger and lower-grade mineralized envelope, and a Gold mineralization known to extend to greater depth, analysts said they predict a deposit of more than 10 Moz, with good potential for 20 Moz and more to eventually be defined.
The first resource for Dixie is expected by Q1 2022 and is expected to include the LP flaw only, with Dixie Limb and Hinge Zone resources at a later date.
Stifel analysts said they based their valuation estimates on a potentially conservative mineable inventory of 12 Moz at an average grade of 1.22 grams per tonne.
“The Great Bear Dixie Gold Project is not unrealistic or fanciful, as the saying goes ‘Whistling Dixie’,” Stifel analysts concluded. “We believe that Dixie not only has what it takes to be a mine, but also a coveted asset in the portfolio of any gold producer.”
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