Post by
Ridgeback on Feb 07, 2024 3:22pm
Sprott Report
Today’s South Pacific Zone drill results continue to highlight the high-grade nature of the deposit, with last year’s surface drilling averaging 5.0m @ 16.7g/t Au.
What we like the most here is the exceptional continuity on both widths and grades. With the ramp already in the upper part of the SPZ, enabling stoping during the first half of this year, and with sound ground conditions here, we see potential for high-grade ounces to fall into the near-term production mine plan, driving positive cash flow from SCPe mid-2024.
Even better, the deposit seems to be drill constrained rather than geology constrained to the north and at depth, indicating potential to grow from SCPe ~500-600koz to >1Moz if extensional drilling keeps delivering.
Today, we maintain our buy rating and C$5.30/sh price target based on 0.60xNAV5%-1850. Trading at just 0.23xNAV vs gold junior developers’ peers at 0.6xNAV and given a catalyst-heavy year ahead with a JV decision, MRE and permitting updates on Ruby Hill, updated MRE/DFS at Granite Creek and an updated MRE/DFS at McCoy Cove as well, in our view IAU is simply ‘too cheap’ to ignore, and that’s before even considering the domestic premium that IAU will realize from its maiden base metals resource at Ruby Hill, as one of the very few near term gold-critical metals producers. S
tepping back, we think that our modelled 500kozpa staged production profile only keeps getting better as drill results from all three core assets are amongst the best drill results in NA, highlights the scarcity value of IAU, a name we think will rebound once FED cuts rates and a gold equities rally materializes.
Highlight hits from today’s drilling include 4.4m @ 28.1g/t Au, 9.4m @ 10.6g/t, 8.7m @ 8.3g/t and 5.2m @ 13.6g/t. The average from 12 surface holes was 5.0m @ 16.7g/t Au. I-80 notes that SPZ development plan will be advanced during 1H24, with an extension of the decline at depth to provide access in order to become part of the i-80 Gold, 07 February 2024 Page 2 E Q U I T Y R E S E A R C H Granite Creek mine plan and a test mining program, followed by additional UG drilling, which eventually, combined with last year’s drill results will feed an updated MRE and a feasibility study.
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As I suggested the drop in the share price is an opportunity to increase a position. There is absolute insanity in valautions for companies like I80. Miners out of favour!YEP!!! Reality of these undervaluations has to ring in one of these day especially with so many events on the horizon, I am amazed at the lack of interest and discounted pricing.