Bardoc ‘one of few remaining WA gold development opportunities of scale’, says Rawson Lewis

East Coast corporate advisory and equity capital markets outfit Rawson Lewis has increased its valuation of Bardoc Gold (ASX: BDC) to 22c/share and its price target to 18c/share, after the WA gold developer snared a crucial gold concentrate off-take deal
15th January 2021
Resources Rising Stars

East Coast corporate advisory and equity capital markets outfit Rawson Lewis has increased its valuation of Bardoc Gold (ASX: BDC) to 22c/share and its price target to 18c/share, after the WA gold developer snared a crucial gold concentrate off-take deal just before Christmas.

The Sydney- and Melbourne-based says Bardoc, which is trading around 8.7c, is continuing to de-risk its namesake gold project near Kalgoorlie and “at some stage, we expect the market will recognise it for what it is – one of the few remaining WA development opportunities with scale, transitioning to production in just over 18 months.”

Bardoc is developing a long-term gold project which, according to the Pre-Feasibility Study completed in March last year, will produce 135kozpa of gold over a 7.75-year mine life, targeting initial production in the September quarter of next year. 

Bardoc signed a binding off-take agreement with global metals trader MRI Trading in December, supporting its development strategy to produce a gold concentrate from Aphrodite, one of its three cornerstone deposits at the Bardoc Project.

“As a Swiss-based global independent trader, with over 20 years’ experience dealing with concentrates produced by Australian miners including Oz Minerals, Sandfire Resources and Silver Lake Resources, we expect the banks will view MRI as a creditworthy counterparty for project financing,” said Rawson Lewis analyst Kurt Worden.

Worden says recent metallurgical testwork across the Aphrodite deposit appears to have resulted in materially higher recoveries to concentrate which, if combined with an increase in gold payability in the offtake terms, could result in recoverable, payable gold increasing from 85% to 92%.

“Bardoc has also indicated concentrate treatment charges are also below those assumed in the PFS, which totalled A$537.20/t concentrate; this should also contribute to improved concentrate production economics in the DFS, due end March quarter 2021,” he added.

Worden says his increased valuation and price target for Bardoc Gold reflects the updated Aphrodite gold recoveries and payabilities, and on rolling forward the valuation to 31 December 2021.

Rawson Lewis expects “significant” news flow from Bardoc through early 2021, with drilling results set to continue to flow from a 40,000m drilling campaign, followed by a full-form off-take agreement, environmental permitting, Ore Reserve and Definitive Feasibility Study at the end of the March quarter.

This will pave the way for financing and a Final Investment Decision by mid-year.

To view a full copy of the Rawson Lewis research note on Bardoc Gold, click here.

Subscribe to the RRS Weekly Wrap

© 2021 Resources Rising Stars All Rights Reserved