Kinross Gold Corporation (TSX:K)’s release of its long-awaited maiden resource for the Great Bear project in Ontario, Canada, is a “significant de-risking milestone,” further unlocking the value of the project, according to analysts at Stifel GMP.
In a note to clients, the analysts wrote that the initial resource at Great Bear of about 5.03 million ounces at 2.94 grams per tonne, 2.7 million ounces indicated and 2.3 million ounces inferred, served as a strong starting base for the project.
They added that they expect Great Bear to grow its resource base, highlighting that the LP Zone remains open along strike and at depth for further exploration opportunities.
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They noted Kinross has planned about 180,000 metres of drilling for 2023, with eight drills turning on the property.
“Drilling and metallurgical studies will inform the PEA for the project which is expected to be completed in 2024, with initial production estimated as early as 2028, subject to permitting,” they wrote.
“Kinross continues to target a potential start of an advanced underground exploration program as early as 2024, adding another future catalyst to the pipeline for this project.”
Stifel’s analysts said the impact of the maiden resource announcement on Kinross was neutral as it was in line with expectations of 4 million ounces to 5 million ounces.
They reiterated their ‘Buy’ rating for the stock but did not award a price target. Kinross’ shares had fallen 1.7% at US$4.11 at noon on Tuesday.
“We currently value Great Bear based on a conceptual open-pit mine discounted cash flow, assuming an open-pit mineable resource of approximately 4 million ounces,” they wrote.
“It’s worth noting that we believe Great Bear will continue to grow beyond the initial resource. We allocated approximately $480 million in ‘plug-value’ for resource upside,” the analysts concluded.
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