ASX mining share Tietto Minerals Ltd (ASX: TIE) finished the session yesterday at 54 cents, down 1.8% for the day and down 18% over the past month.
This gives the junior gold miner a market capitalisation of $598.15 million.
Katana Asset Management says the ASX mining share is 'simply too cheap' at this price level.
Let's find out a bit more about Tietto Minerals.
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Junior ASX mining share offers big value
Tietto owns West Africa's newest producing gold mine, the Abujar Gold Project on the Ivory Coast.
Tietto is in the final stages of ramping up to full production after achieving its first ore production in December 2022 and its first gold pour in January this year.
The miner expects to reach or exceed full nameplate production by next month.
Broker impressed by low-cost, long-life mine
Tietto Minerals shares are down almost 30% in the year to date and down 18% over the past month.
Katana's Australian equity fund portfolio manager Romano Sala Tenna told the Australian Financial Review (AFR) that this recent pullback has provided a buying opportunity.
Sala Tenna said:
[Tietto Minerals] has just finished construction and has commenced production at its mine in the safe jurisdiction of Cote d'Ivoire.
The recent pullback in its share price values the business at under $600 million.
This is simply too cheap for a low-cost, long-life company that will soon be producing at around 200,000 ounces per annum.
What's the latest news from Tietto?
Tietto recently upgraded the Abujar mineral resource estimate by 10% to 3.83 Moz.
The company is now revising its Life of Mine production plan for delivery in Q3 CY23.
Tietto Managing Director Dr Caigen Wang said Abujar is "an extensive gold system of which less than 10% has been explored to date".
He expects the revised Life of Mine plan to show "significant improvements."
In its March quarter report, Tietto said it expects to produce 25,000 to 30,000 ounces of gold in Q2 2023.
From there, it forecasts gold production of between 105,000 to 120,000 ounces from 1 July to 31 December at an all-in sustaining cost (AISC) of US$875 to US$975 per ounce.
Its full-year forecast is 134,000 ounces to 154,000 ounces.
A 'healthy financial position'
Like all ASX gold shares, Tietto is benefitting from high gold prices.
The spot gold price has recently been testing its previous record high of US$2,069.40 set in 2020.
Tietto said its gold sales in the March quarter totalled 7,586 ounces at an average price of US$1,980 per ounce.
In a statement, the company said:
Tietto ended its first partial quarter of Abujar operations in a healthy financial position with $6.96m
cash on hand and $5.7m in bullion on hand and is expecting strong cash generation from operating
activities in Q2 2023.
Perfect timing for this ASX mining share
It seems that full production at Abujar is coming online at just the right time.
Top broker Goldman Sachs is forecasting the average gold price to go higher over coming years.
Goldman is expecting an average price per ounce of US$2,008 in Q2 FY23, US$2,078 per ounce in Q3 FY23, and US$2,108 per ounce in Q4 FY23.
It gets better in 2024 with the Goldman team tipping an annual average of US$2,175 per ounce.
They predict an average gold price of US$2,087 per ounce in 2025 and US$2,000 per ounce in 2026.
