The new Argus zone discovery at the Munro-Croesus project adds an attractive, new target for HighGold (TSX-V:HIGH, OTCQX:HGGOF) Mining Inc in Ontario, says broker Stifel GMP, which repeated a 'Buy' on the shares.
On May 9, the gold explorer reported that first pass drilling at the new zone on the western side of the project had hit wide intervals of gold mineralization in the first two holes.
Highlights included 136 metres (m) at 0.54 grams per ton (g/t) gold, starting at a depth of 70m in one and 37.4m at 0.27 g/t gold starting at 2m depth in another.
"The discovery demonstrates the potential endowment across this land package, especially given their proximity to other large known resources along the same geologic trend," said Stifel analysts.
"These results show a shallow, bulk-tonnage style of mineralization typical of other deposit along trend like Mayfair's Fenn-Gib deposit and Moneta's open pit sources at Tower Gold, they added.
READ: HighGold Mining highlights assay results from drill programme at Munro-Croesus project
"HighGold trades at what we view as a very attractive valuation of only $28/oz, significantly below its North American peer average of $52/oz. On a spot P/NAV basis it trades at 0.15x, less than half its peer average of 0.33x.
Stifel analysts said they believed this valuation presents an "excellent opportunity" to enter the stock ahead of the JT Main resource update expected this quarter.
"We also look forward to the results from the additional 24 holes drilled through the winter in Ontario and the release of the 2022 exploration plan in Alaska. We maintain our Buy rating and target price of C$2.75," they added.
HighGold (TSX-V:HIGH, OTCQX:HGGOF)’s flagship asset is the high-grade Johnson Tract gold (zinc-copper) in Alaska. It also controls a portfolio of quality gold projects in the greater Timmins camp, Ontario, which includes the Munro-Croesus Gold property and the large Golden Mile and Timmins South properties.
Contact the writer at giles@proactiveinvestors.com