Canaccord Genuity recently highlighted its top picks among precious metals producers and developers featuring companies including Bellevue Gold Ltd (ASX:BGL) (OTCMKTS:BELGF), Perseus Mining Limited (ASX:PRU) (TSE:PRU) (OTCMKTS:PMNXF) and Red River Resources Ltd (ASX:RVR) (FRA:R1R).
Bellevue Gold
Bellevue is a top pick among the gold developers under Canaccord’s coverage.
The company recently increased its total resources by 300,000 ounces to 3 million ounces at 9.9g/t, representing an 11% increase in three months.
Importantly, the indicated resource has also grown by 200,000 ounces to 1.4 million ounces at 11g/t representing a +16% increase, and notably, the increase in both cases has not come at the expense of lower grades.
With a growing high-grade resource and reserve base, pragmatic mine plan which should continue to improve over time and a management team of high calibre professionals, Canaccord continues to see Bellevue as an exciting development proposition.
The global capital markets group has maintained its SPECULATIVE BUY recommendation for Bellevue.
Next catalysts
- Exploration updates - ongoing every 4-6 weeks
- Reserve upgrade - SepQ'21
- Stage 2 Feasibility - SepQ'21
- Order long lead items - SepQ'21
- Project finance - DecQ'21
Perseus Mining
Perseus successfully commissioned its third mine at Yaoure in MarQ'21, with commercial production declared ahead of schedule.
Shorter-term production is expected to improve on Yaoure ramp up (FY21E guidance is an easy target in Canaccord’s view), while 2HCY21E should see Perseus achieve a run rate of ~500,000 ounces per annum (+50% YoY).
Canaccord estimates a ramped up Yaoure to drive a substantial lift in earnings/FCF (FY22E FCF yield 26%), while potential for mine life extensions (Sissingue) could provide near term valuation levers.
Red River Resources
Among the small producers, Canaccord continues to highlight Red River as a miner with sunk capital, leverage to base and gold prices with optionality on the expansion of operations at Hillgrove.
Canaccord has already accounted for the potential settlement of a case over royalty payments and believe Red River is near an FCF inflection point.