Gold is on a historic run, breaking decades old records. With this uptick, the interest in gold stocks has also increased manifold.
Investing in Gold Mining Stocks not only enables an investor to diversify, it acts as a natural hedge against inflation and economic uncertainty. Additional benefit of investing in Top Gold Companies is the upside optionality that arises from potential major discoveries.
De Grey Mining Limited (ASX: DEG)
De Grey Mining Limited is one of the well known gold companies to invest in. It recently progressed in securing financing for its Hemi Gold Project. The Company has obtained credit approvals for a proposed A$1.0 billion senior debt facility, complemented by its substantial existing cash reserves exceeding A$850 million. This combined funding is expected to fully cover the development costs of the project.
On 11 July 2024, De Grey Mining reported the Hemi Regional Scoping Study results. The study evaluated the development potential of deposits adjacent to its Hemi Gold Project
The study categorizes the mineral resources with Measured and Indicated classifications contributing to 84% of the recovered gold, with the remaining in the Inferred category. Excluding the Regional deposits, the Hemi Gold Project is supported by 99% Probable Reserves. The Hemi Regional deposits hold a total estimated mineral resource of 41 million tonnes at an average grade of 1.7 grams per tonne, amounting to approximately 2.2 million ounces of gold across Measured, Indicated, and Inferred categories.
Secured a 15-year lease on the Mt Dove tenements from Atlas Iron provides De Grey Mining with crucial off-site facilities for equipment transit and storage, strategically located 10 kilometers south of the Hemi Gold Project. This arrangement clearly demonstrates the readiness for project commencement upon receiving approvals, streamlining logistics and potentially reducing operational delays and costs associated with equipment mobilization.
De Grey Mining Limited has secured an Exclusive Option Agreement to acquire Kalamazoo Resources' Ashburton Gold Project, thus strategically progressing its business development. This agreement encompasses Kalamazoo's substantial 1.44 million-ounce gold Resource and a large exploration area covering 217 square kilometers.
On 26 June 2024, DEG announced significant progress in its drilling efforts at the Eagle and Diucon deposits within the Hemi project. The primary aim has been to expand the Mineral Resource Estimate (MRE) established in November 2023, particularly at Eagle and Aquila, suggesting additional potential beyond initial feasibility studies.
De Grey Mining's progress in advancing the Hemi Gold Project, as outlined through the FEED milestones and power supply negotiations, lays positive outlook for investors. Achieving the 30% milestone in Front-End Engineering Design (FEED) by the September quarter of 2024 indicates substantial progress towards project readiness. Simultaneously, nearing finalization of a Power Purchase Agreement (PPA) demonstrates successive efforts to secure essential infrastructure for operational efficiency.
The Hemi Regional Scoping Study highlights the project's potential to significantly enhance gold production, projecting up to 700,000 ounces annually by Year 4. This substantial increase in production, supported by a robust resource base and favorable economic metrics—including an estimated AISC of $1,820 per ounce of gold, pre-tax NPV of $300 million, IRR of 43%, and a short payback period of 3.5 years positions the project as a promising investment opportunity.
Furthermore, funding the initial $210 million capital cost from operating cash flows generated at the Hemi Gold Project reflects financial prudence and operational self-sufficiency. This clearly demonstrates De Grey Mining's ability to effectively manage costs and deploy capital efficiently.
De Grey Mining Limited is well-positioned for robust growth and value creation in the gold mining sector. The company's strategic advancements, such as the significant high-grade drilling results at the Eagle deposit and the acquisition of the Ashburton Gold Project, demonstrate its commitment to expanding its resource base and enhancing project value
Source: Company's Report
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