Stifel GMP has reiterated a 'Buy' recommendation on HighGold Mining Inc (TSX-V:HIGH, OTCQX:HGGOF) after the company posted its latest drill assays from the high-grade Johnson Tract (JT) polymetallic gold project in Alaska, including one hole, which the company said would improve the current mineral resource.
"The headline assay was 84.7m of 8.9 grams per tonne (g/t) AuEq from an infill hole in the upper part of the resource - higher grades than indicated by the block model," noted the Stifel analysts.
"Infill drilling the down plunge portion of the deposit outside the resource envelope continues to define the deposit hitting multiple zones of mineralization, albeit at slightly lower grade thicknesses than we were expecting," they said.
The analysts added that, even with that slightly lower grade, HighGold (TSX-V:HIGH, OTCQX:HGGOF)'s drilling continues to build ounces for an updated resource due to be released in the first half of next year.
READ: HighGold Mining reports latest drill results from Alaska project, including one hole which it says will improve resource
"There are 25 more holes from the JT main area yet to be released plus additional holes from the Difficult Creek area which was recently discovered as a zone of ultra-high grade," they noted.
The company trades at spot P/NAV of just 0.33 times' using the broker's 10% discount rate for a discounted cash flow (DCF) valuation for JT Main, said Stifel.
"We look forward to the additional results from the Johnson Tract property as well as the assays from Munro-Croesus (expected mid-Q1)," added the analysts.
The broker maintained a price target of C$3 a share, compared to a current price of C$1.33.
Contact the writer at giles@proactiveinvestors.com