Sprott Equity Research analysts kicked off coverage of Reunion Gold Corporation with a 'Buy' rating and C$0.50 per share target price, calling its Oko West project the “discovery of the year with greater than three million ounce potential in Guyana.”
“The potential we see is for an asset like Great Bear’s Dixie Lake (sold for C$1.8 billion) or Rupert’s Ikkari (4 million ounces of 2.5 grams per tonne gold, C$950 million market cap),” the analysts said.
They noted that most drilling has been less than 200 metres (m) deep, although early 2022 drill results that included of 93m of 2.8 g/t gold to about 220m below surface and 2.45 g/t over 64.7m to a vertical depth of approximately 302m should lift its resource potential next year.
“Adding undrilled strike extensions, in the long-term we see 3 to 5 million ounce potential here,” they added.
The Sprott analysts also highlighted Reunion Gold’s seasoned Guiana Shield exploration team, led by Golden Star veteran David Fennel, who were associated with Omai (Guyana) and Rosebel (Suriname) in previous roles.
They pointed out that Guyana’s permitting regime makes it the leading country to explore, permit and mine in the Shield, as mining companies such as Barrick Gold, Gran Columbia, and China’s Zijin all made investments in South America’s only English-speaking nation.
The analysts suggest that even a $0.70 to $0.80 Reunion Gold share price is achievable but should the company prove a three million ounce reserve, it could add 50% to the potential investor return.
Contact Sean at sean@proactiveinvestors.com