Research Capital Corp has repeated a 'Buy' on Mandalay Resources Corp following news yesterday, which confirmed the discovery of a new high-grade area of mineralization at the company's Costerfield underground gold mine in Australia.
The broker also repeated its C$5.50 share price target for the stock. Shares in Mandalay are currently changing hands for C$2.45.
On October 26, the metals miner reported results from a 17-hole diamond drill program from the Brown’s prospect at the mine, which included 19.9 grams per tonne (g/t) gold over a true width of 1.7 metres (m).
Analysts at Research Capital noted that Mandalay had first tested the Brown’s prospect with two opposing holes in mid-2020 "given its coincidence with the historic Felix lode mine, located around 2km east of the producing Youle and advancing Shepherd high-grade zones".
READ: Mandalay Resources intersects high-grade gold at its Costerfield operation in Australia
In the latest drilling, hole BWN-009 returned 1.01m grading 19.5 grams per tonne (g/t) gold and 2.4% antimony, including 0.51 metres (m) at 38.4 g/t gold and 4.6% antimony. Hole BWN-023 cut a similarly rich intercept of 1.7m grading 19.9 g/t gold including 158.4 g/t gold in the first 0.09m and 110.8 g/t gold in the final 0.16m. Results from the other holes varied from 0.2-125 g/t gold, plus varying amounts of antimony, but the widths were generally narrow, varying from a few centimeters to 1.9m in true thickness, wrote the analysts.
"Clearly, more drilling is required to fully assess the target, particularly in light of its structural comparison with the nearby, multi-million-ounce Bendigo and Castlemain deposits," they added.
"MND also notes that its confirmation opens up the potential to the south, towards the Robison prospect, which five holes from the 2020 scout program showed to be geologically similar as Brown's. Surface programs are underway in preparation for more drilling," they said.
Mandalay Resources produces gold, silver and antimony. The company is focused on operating and optimizing its mines at Costerfield in Australia and Björkdal in Sweden. Both assets have the potential for further growth via production and exploration.
Contact the author at giles@proactiveinvestors.com