The De Grey Mining Limited (ASX: DEG) share price is having another positive session.
In afternoon trade, the ASX 200 gold share is up 2% to $1.24.
This means its shares are now up 15% since this time last week.
Can this ASX 200 gold share keep rising?
The good news is that analysts at Goldman Sachs believe that De Grey Mining's shares can rise further from here.
According to a note this morning, the broker has upgraded this gold share to a buy rating with a $1.40 price target.
This implies a potential upside of approximately 13% from current levels.
What did the broker say?
Goldman Sachs made the move in response to the release of the company's definitive feasibility study (DFS) and equity raising. It feels this has de-risked the gold developer's world-class Hemi project in Western Australia. The broker summarises:
The DFS and narrow discount equity raise support an incremental de-risking of Hemi as a Tier 1 global asset at >500kozpa and potential strategic consolidation target. With further optionality across regional exploration/expansion, and at discount to peers, we upgrade DEG to Buy, PT A$1.40/sh, with DEG trading at ~0.85x NAV, or pricing ~US$1,580/oz gold (peers ~1.05x / ~US$1,800/oz).
And while Goldman acknowledges that mining shares have a tendency to underperform during the development stage, it doesn't expect this to be the case with De Grey Mining. Goldman explains:
While historically, mining stocks tend to underperform through the execution and ramp-up phase of a project, we expect with Hemi positioned as a Tier 1 asset of global scale that post-DFS it remains an attractive potential strategic consolidation target.
All in all, the broker appears to see this ASX 200 gold share as a good option for investors wanting exposure to the precious metal.
