THE CONFERENCE CALLER: Cashed-up punters seeking something in the small-end-of-town gold space should get advice from their financial advisers re Bardoc Gold (ASX: BDC), which could well be on the verge of a substantial share price hike over the next 12 months. By Mark Fraser
During the coming year the West Australian company is expected to make a final investment decision regarding its $140 million namesake yellow metal project located just 40 kilometres north of Kalgoorlie-Boulder, where it has already established a 3.03 million gold ounce resource and 790,000 ounces of reserves within a prospective land holding covering 250 square km.
As it stands, Bardoc is hoping to set up a 135,000 ounces per annum operation via the annual processing of 1.8 million tonnes of ore with an average life-of-mine grade of 2.6 grams per tonne.
All-in sustaining costs are expected to be around $1,220 per ounce, while the initial mine life has been pencilled in at 7-8 years.
According to Bardoc chief executive Robert Ryan, the explorer is sitting on, “one of Australia’s best undeveloped gold deposits”.
Furthermore, the project is now only one of a handful of new plus-100,000 ounces per annum yellow metal operations expected to come on stream Down Under over the next two years.
Speaking during the opening day of the 2020 Diggers & Dealers Mining Forum in Kalgoorlie-Boulder, Ryan said the company currently had the funding in place to complete Bardoc’s definitive feasibility study, with this phase of due diligence now expected to be wrapped up by the end of March next year.
If all goes to plan, he suggested, construction should be underway by this time next year.
These facts should be a wake-up call for investors given: (1) most juniors with economically attractive projects are significantly revalued around the time their DFS findings are released; (2) Bardoc’s current share price is only 7.8 cents, which on face value is quite a bargain for a gold stock with undeniable upside, and; (3) recent interest from the financial sector has been strong, with “a number of institutions” joining the junior’s register in its last capital raising.
Ryan said the project effectively brought together a series of smaller ore bodies in a location that had remained largely under-explored due to previous fragmented ownership.
They included Aphrodite, which has a current resource of 22.9 million tonnes at 2.3g/t gold for 1.99 million ounces and was acquired via a corporate merger in 2017, as well as Excelsior and Zoroastrian, where the respective resource numbers are 8.4 million tonnes at 1.2g/t for 320,000 ounces and 7.28 million tonnes at 2.2g/t for 526,000 ounces.
Aside from owning a project with compelling high margin/low cost/high-grade credentials, Ryan said Bardoc had also attracted the right talent to make the undertaking a reality.
“Over the last 12 months we have significantly built out our management team to contain a lot of Kalgoorlie-centric mining expertise, as well as environmental expertise, to get this project into production,” he noted.
“We raised $24 million (at the company’s last capital raising); primarily aimed at building the support from the investment community that are going to be there for a larger equity raise when it comes to construction build.
“The people who we have on the register now have made commitments to be there for 2-3 times their current investment – to be there to build the project.
“And that’s a fantastic position to be in because it has given us the ability to be able to push the project at 100 miles an hour.”