Genesis site visit impresses Argonaut with ‘value creation options aplenty’

A recent site visit to Genesis Minerals’ (ASX: GMD) recently expanded Ulysses gold project in Western Australia has struck a chord with Argonaut Securities
4th September 2020
Resources Rising Stars

A recent site visit to Genesis Minerals’ (ASX: GMD) recently expanded Ulysses gold project in Western Australia has struck a chord with Argonaut Securities, with the broker saying the project offers “significant value upside”.

Argonaut analysts Michael Eidne and Matt Keane have reaffirmed the broker’s Speculative Buy recommendation on the $142 million gold explorer-developer, with a 10c target price (compared with the recent trading price of 7.8-8c).

“We were impressed with the operations and the infrastructure in place,” Eidne wrote in a recent update note.

“In our view, the project is well located geographically and offers compelling upside in terms of value creation via the drill bit and through the development of a mining operation,” he said.

The Ulysses project lies 35km south of Leonora by road, in the heard of the goldfields with several substantial operations such as AngloGold’s 10Moz Sunrise Dam mine and St Barbara’s 8Moz Gwalia operation nearby.

Following the recent transformational acquisition of the adjoining Kookynie gold project, Genesis has super-sized its Ulysses project, increasing the total Mineral Resource base across the expanded area to 17 million tonnes at 2.34g/t for 1.28 million ounces.

The $13.5 million Kookynie acquisition included a JORC Resource of 414,000 ounces across six deposits, putting the company on a firm growth trajectory towards the establishment of a significant new standalone gold mining and processing operation based on the expanded Resource base.

“Our recent site visit included an inspection of the previously mined Ulysses pits and the newly-acquired Kookynie area,” Argonat wrote.

Genesis recently kicked of a 25,000m drilling program on the expanded project area targeting the Admiral, Clark, Butterfly and Orient Well deposits on the newly-acquired Kookynie tenements.

“This systematic drilling campaign aims to grow current Resources and define an Ore Reserve,” Argonaut said.

“The program should give the company a steady stream of news flow over the coming months. Recent positive results from AC drilling at the Archduke prospect has extended the known mineralisation over a strike of 1,000m directly to the south-east of Admiral-Clark-Butterfly.

“The shallow oxide mineralisation will increase the mining inventory and Genesis is planning a comprehensive follow-up RC program in Q4 2020.”

Argonaut says the project offers “significant value upside” from both exploration success, and as a development proposition.

“The Ulysses orebody is of sufficient grade and size to support a long-life underground mine, and the recently acquired Kookynie project provides several attractive options in terms of open pit mines,” it said.

“There is Resource upside potential both within the Ulysses deposit and regionally, where much of the historic drilling is less than 100m deep.

“High quality roads connect all deposits and the project is close to amenities such as water, gas pipelines and sealed roads.”

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