Resolute Mining Ltd (ASX: RSG) shares have jumped 3.65% higher in Tuesday morning trade. At the time of writing, the ASX mining stock's shares are changing hands at $1.14 a piece.
It's been a year of success for the African-focused gold mining company. Its shares have climbed 8.1% higher over the past month and are now up a huge 183.75% higher over the past year.
The ASX mining stock joined the ASX 200 index this month.
And just yesterday, the ASX gold miner released more good news. A major update on its Doropo Gold Project in Côte d'Ivoire has revealed that there is a significantly larger, longer-life, and more valuable project than previously outlined. The new Definitive Feasibility Study (DFS) findings has increased the site's ore reserves by approximately 55% and lengthened the expected mine life to 13 years, from 10 years previously.
Following the latest update, analysts at Macquarie Group Ltd (ASX: MQG) have written a note to investors outlining their latest expectations for the ASX mining stock.
More upside ahead for Resolute Mining shares
In the note, the broker confirmed its outperform rating on Resolute Mining shares. It also raised its target price to $1.45 a piece, up from $1.35 earlier this month.
At the time of writing, the upgraded target price represents a potential 27.2% upside for investors over the next 12 months.
"Our NAV increases 12% following the incorporation of Doropo DFS due to the longer mine life and increased production which drives a TP increase of 7%/8% to A$1.45/£0.72. Our 50/50 blend of 1.0x NAV, 7x OCF methodology is also unchanged," the broker said.
"Doropo will become RSG's third operational asset and provides important geographical diversification outside Mali (Syama) and Senegal (Mako), opening up a third production asset in Côte d'Ivoire."
What else did Macquarie have to say about the ASX mining stock?
Macquarie analysts said they have incorporated the DFS findings into their forecasts for Resolute Mining, with initial capital costs of US$516 million and life of mining (LOM) gold production expected at around 2.14Moz.
The broker said it conservatively estimates operating costs to be around US$1,652 per oz, compared with the DFS guidelines of US$1,406 per oz.
"After incorporating the DFS into our forecasts, our NAV [net asset value] for Doropo has increased 51% to A$1,633m (~US$1,085m), and we calculate a post-tax IRR of 39% which compares to the DFS at US$1,457m and 49%, respectively. Doropo is now RSG's highest value project and is responsible for ~51% of the NAV for RSG," Macquarie's analysts said.
