Post by
Ridgeback on Jan 18, 2024 7:25am
Analyst Update
We see three main takeaways from today’s drilling at Ruby Hill.
First, the hits from East Hilltop average 13.1m @ 5g/t AuEq (79% base metals, 21% precious - 0.3g/t Au / 69g/t Ag / 0.2% Cu / 1.1% Pb / 8.4% Zn), in line with our 1-2Mt estimate for East Hilltop.
Even better, the headline hit of 114.3m @ 4.2g/t comes from the fringes of the system and the system remains open and growing.
Second, today’s average of 18.3m @ 12.5g/t AuEq from Upper Hilltop, comes at slightly higher grade and a nice beat to our SCPe estimates of 1.7Mt @ 10.5g/t, and continues adding necessary pierce points ahead of the maiden MRE.
Lastly, we were pleased to see regional exploration returning such high-grade and rich in precious metals intercepts such as hole-55 which hit 19.5% Zn, 10.2% Pb, 1.2% Cu, 1181g/t Ag and 0.7g/t Au over 1.5m, which was a significant step-out to the SW. Stepping back, we think that our modelled 8Mt @ 7.7g/t AuEq (6.5Mt @ 7.6g/t inventory) seems conservative, as now with the drill bit growth between Blackjack and East Hilltop, we see potential for 10-11Mt drilled with potential for 12-15Mt with more step outs which at these grades translates to a ~200koz pa AuEq mine with 10-15 years of LOM.
Today, we maintain our buy rating and C$5.30/sh price target based on 0.60xNAV5%-1850. Trading at just 0.22xNAV and with precious metals sentiment already strong with even better future as 5-6 rates cuts are priced in for this year, we think that I-80 is an undervalued and domestic name that will bounce back in 2024, and has put out some of the best drilling results of any company in North America
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Ridgey's opinion take advantage of dips and contrary sentiment in the mining sector with companies like IAU.