HighGold (TSX-V:HIGH, OTCQX:HGGOF) Mining Inc is "too cheap to not buy", according to Stifel GMP, which reckons the stock is due for a rebound.
The gold explorer, whose flagship project is Johnson Tract in Alaska, and which also has assets in Timmins, Ontario, has a current market cap that is the same as on June 30, 2020, note the analysts.
This completely ignores the following progress, they suggest:
- A doubling of the mineral footprint at the JT Main deposit
- The discovery and definition of the Footwall Copper Zone at JT Main
- Ultra high grade discovery (578 g/t gold + 2,203 g/t silver over 6.4m) at Middle Difficult Creek
- Consolidation of the company's Munro-Croesus land package in Ontario
- Refined geologic model resulting in the ability to consistently hit gold-bearing structures in Timmins, Ontario
"On only the current resource of 800koz AuEq, HIGH currently trades at an EV/oz of just $32 per global resource AuEq ounce – an undeserved discount to the North American peer average of $53/oz," the analysts added.
"This becomes even more poignant when you take into account the fact that the JT Main orebody is amenable to bulk minable (i.e. low cost) underground extraction and surrounded by highly prospective ground."
Among the near-term catalysts, said Stifel, is a resource update for JT Main expected in the second quarter of 2022, noting that a total of 27,000m of drilling has been done since the current 810,000 gold-equivalent (AuEq) resource was published.
"We expect the May 2022 resource to come in near 1.1Moz at 7.5 g/t AuEq and that 85% of that tonnage will eventually be converted to reserves," noted the broker, which repeated a 'Buy' stance and C$2.75 target price.
Contact the author at giles@paidpromotionalmessages.com