With the gold price hitting a record high this month, many investors are likely to be looking to gain exposure to the precious metal.
But which ASX 200 gold shares are still good value?
One that could be better than good value is Regis Resources Ltd (ASX: RRL).
In fact, analysts at Bell Potter think this gold miner could be dirt cheap at present.
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What is the broker saying about this ASX 200 gold share?
Bell Potter notes that Regis Resources has just released the definitive feasibility study (DFS) for the 100%-owned McPhillamys Gold Project in New South Wales.
The broker was pleased with the DFS and notes that project metrics were at least in line with its expectations. Its analysts explain:
In our view, the McPhillamys project presents as a strategic, long-life gold project that is highly leveraged to a rising gold price. Overall, the project metrics have been delivered either in-line with or ahead of our expectations and compare favourably with the most recent guidance on key project parameters.
Bell Potter also highlights that it was particularly pleased with its lower than expected costs. It adds:
Most specifically, pre-production CAPEX is at the lower end of our expectations and AISC are well below our expectations. AISC are also well below an industry average we most recently measured at ~A$2,100/oz. While CAPEX is relatively high compared with its Australian peer group, we believe opportunities exist to mitigate this through further Resource growth and definition of high grade satellite ore sources.
Dirt cheap
According to the note, in response to the McPhillamys DFS update, the broker has retained its buy rating with a trimmed price target of $2.70 (from $2.80).
Based on its current share price of $1.91, this implies potential upside of 41% for this ASX 200 gold share over the next 12 months.
To put that into context, a $10,000 investment would be worth $14,100 by this time next year if Bell Potter is on the money with its recommendation.
Commenting on its buy rating, the broker said:
We lower our medium-term production forecasts to match recent guidance from RRL, which includes reduced production and higher cost forecasts. This results in earnings changes in this report of: FY24: -4%; FY25: -30% and FY26: -27%. Our NPV-based valuation drops 4%, to $2.70/sh as we update for this, which is partially offset by an improved valuation for McPhillamys. We retain our Buy recommendation.
