G Mining Ventures Corp (TSX-V:GMIN, OTCQX:GMINF) is moving onto its next leg of growth following the company’s completion of its acquisition of Reunion Gold Corporation (TSX-V:RGD, OTCQB:RGDFF) earlier this week, analysts at Jefferies believe.
The acquisition adds the Oko West project in Guyana to G Mining’s existing portfolio of Brazilian assets, including its flagship Tocantinzinho project.
“This deal brings Oko West into the development pipeline, which hosts nearly two times the measured and inferred (M&I) resource at Tocantinzinho in terms of both ounces and grade, has potential to produce up to 300 to 350kozpa combined from open pit and underground mines, and would lift the company to mid-tier producer status,” the analysts wrote in a note to clients.
They model the Oko West mine starting up in 2028.
“G Mining plans to accelerate Oko West through technical studies and construction over three to four years, supported by cash flow and learnings from Tocantinzinho,” they wrote. “A PEA for Oko West is expected in Q3 2024.”
Focus in the near term will be on ramping up Tocantinzinho, the analysts believe.
The project achieved its first gold pour on July 9, with commercial production expected in the second half of the year.
They model Tocantinzinho producing 48,000 oz at an all in sustaining cost (AISC) of $1,266 per ounce in the second half of 2024.
They see production ramping up to 192,000 oz at a lower AISC of $922 per ounce in 2025, stepping up to mid-tier producer status at about 500,000 ounce per annum with the delivery of Oko West in 2028.
“With the acquisition of Oko West, G Mining has executed on its plan to acquire a second asset to leverage its mine-building expertise as it turns over Tocantinzinho to operations,” they wrote.
“However, for now, the most important deliverables, in our view, are completion of the Tocantinzinho project on time and budget (validates the teams' construction expertise) and for the company to demonstrate its ability to operate its first asset starting with attaining commercial production and ramping up to design parameters.”
The analysts repeated their ‘Hold’ rating and C$10 price target on G Mining, which traded hands at C$9.35 late morning on Thursday.