If you're wanting exposure to gold, then De Grey Mining Limited (ASX: DEG) could be the way to do it.
That's the view of analysts at Bell Potter, which believe big returns could be on offer with this ASX 200 gold share.
What is the broker saying about this ASX 200 gold share?
According to a note released today, Bell Potter has retained its speculative buy rating on the gold developer's shares with an improved price target of $1.93.
Based on the current De Grey Mining share price of $1.29, this implies a potential upside of approximately 50% for investors over the next 12 months.
Bell Potter notes that the company released an updated mineral resource estimate for its 100%-owned Mallina Gold Project (MGP) in Western Australia. That update revealed a 10% increase in its resource to 278Mt at 1.3g/t gold for 11.7Moz contained.
This bodes well for the company ahead of the upcoming definitive feasibility study (DFS) and ore reserve update, which is expected to be completed in the September quarter of 2023.
Why buy De Grey Mining shares?
Bell Potter explains its bullish view on the ASX 200 gold share. It said:
DEG held $145m in cash at end March 2023. This should be sufficient to complete the DFS, reach the Final Investment Decision (FID) and commence early site works in the event of a positive decision. Based on the PFS outcomes, our own modelling and this latest Resource update, we believe the MGP can support a large-scale, long life production asset with operational flexibility and robust margins in one of the world's top mining jurisdictions.
We view the MGP as a rare opportunity that is attractive as both a foundation production asset for DEG or as a meaningful acquisition for any of the world's top gold production companies. Our valuation lifts by 7%, to $1.93/sh on the increased Resource base and improved (notional) project metrics. We retain our Speculative Buy recommendation.
