With gold prices making new highs and many analysts expecting this to be the start of a new bull run, it is an opportune time to look at the ASX penny gold stocks.
Penny gold stocks can not only offer leveraged exposure to the price of gold but these also have chance of new discoveries or expansion of operations. Investing at this stage can help realise more significant returns over time.
Two such stocks with promising future prospects are
Ausgold Limited (ASX: AUC)
Ausgold Limited recently announced the successful completion of the acquisition of two agricultural properties situated in critical mining and infrastructure zones associated with the Katanning Gold Project (KGP), thereby significantly mitigating risks related to project development.
Ausgold possesses the most extensive land tenement package within the promising Southwest Yilgarn Greenstone Belt, encompassing over 5,500 km² of territory that includes a considerable 130 km strike of underexplored greenstones. This presents significant potential for resource growth for the company. The company's extensive exploration initiatives in previous years have successfully established a substantial mineral resource base exceeding 3 million ounces, alongside total reserves amounting to 1.28 million ounces. This foundation not only supports operational readiness but also guarantees strong future production capabilities. Additionally, the company's flagship project, KGP, offers the potential for open-pit mining, which is likely to facilitate efficient and cost-effective mining operations for Ausgold in the future.
Ausgold is advancing notably towards the commercialization of its operations, having successfully finalized the Pre-Feasibility Study (PFS) for the KGP. In the short term, the company has initiated a strategic assessment of the KGP development plan, with the Definitive Feasibility Study (DFS) expected to be completed by the first half of 2025.
Ausgold, although still in the nascent phases of its exploration activities, exhibits all the characteristics of a potentially dominant player in the Australian Gold Industry. Its current resource base and ore reserves are markedly superior to those of its peers, and their accessibility provides a robust assurance of the project's commercial and economic viability. This is further demonstrated by the recent PFS, which indicates a projected Net Present Value (NPV) of $541 million and an Internal Rate of Return (IRR) of 46%, alongside a remarkably short payback period of just 20 months. Additionally, the company's extensive land holdings and solid financial position facilitate ongoing exploration and resource expansion, thereby fostering significant long-term scalability and sustained capital growth for its stakeholders.
Wia Gold Limited (ASX: WIA)
Wia Gold Limited (ASX: WIA) is leading a promising gold exploration initiative with a significant discovery at Kokoseb in Namibia, where the company has identified a 2.12-million-ounce gold resource at a remarkably low discovery cost of under US$3 per ounce. Their operations are supported by Namibia’s stable political environment, established mining industry, and excellent infrastructure, which includes road access from the capital, Windhoek. Additionally, their extensive exploration portfolio in Côte d’Ivoire features several strategically located projects, including Mankono, Bouaflé, Bocanda, and Issia, each showing considerable gold potential.
The company’s aggressive Growth Strategy is underpinned by a series of successful capital raises and drilling campaigns. Since June 2019, they have made notable strides in Namibia, evidenced by the rapid development of the Kokoseb project, which saw its maiden inferred resource increase by 63% to 2.12 million ounces in just 11 months.
Looking ahead, Wia Gold is strategically positioned for substantial growth with its dual-focus approach in Namibia and Côte d’Ivoire. In Namibia, the company plans to further develop and expand the Kokoseb resource, leveraging its low-cost exploration model to explore additional targets within its extensive 3,000 km² license area. They aim to enhance the existing resource and potentially discover new deposits, solidifying their position as a leading multi-mine operator in the region. In Côte d’Ivoire, the company’s strategy includes advancing their exploration projects with a comprehensive 10,000-meter drilling program at the Bouaflé project, which is expected to contribute significantly to their resource base. They will also conduct follow-up drilling on promising anomalies identified at the Mankono and Issia projects after the rainy season. This targeted approach, combined with a commitment to cost-effective exploration, positions the company for continued success and growth. The combination of high-potential assets and a robust exploration strategy is likely to drive significant value creation and potentially lead to further transformational discoveries in both regions.
Source: Company’s Report
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