G50 Corp Ltd (ASX: G50) has piqued the analyst team at Morgans, which has initiated coverage with a speculative buy recommendation.
Image source: Getty Images
Drilling success builds confidence
The company's flagship asset is the Golconda project in Arizona, where it recently reported that drilling had confirmed "significant mineralisation" over 1.3km and at depths of up to 400m.
Some of the more significant results included 16.8m at 4.34 grams per tonne of gold from 216.4m, and 13.4m at 1.63 grams per tonne of gold and 30.99 grams per tonne of silver from 192.9m.
The company said:
Drilling was highly successful and definitively met the objectives confirming strike, depth and lateral extensions to the known mineralisation at Golconda. Drilling also continued to test the high priority gallium target with all holes reporting significant and consistent shallow intercepts. The continued work on gallium at Golconda supports the company's strategy for potential future development of a strategic domestic gallium supply, integrated within a primary precious and base metals project.
G50 Managing Director Mark Wallace said the drilling almost doubled the drill-tested strike length at Golconda.
He said:
Identifying significant precious metal intercepts within parallel veins is an exciting discovery for all involved. Golconda is a large-scale, polymetallic gold-silver-zinc project with significant potential. Growing geopolitical and commercial pressures are increasing interest in our Arizona-located project. Based on current mineralogy and metallurgical work, the G50 team is well-positioned to discover and potentially supply the Western world with secure strategic and precious metals.
Shares in this ASX gold developer are looking cheap
The Morgans team agreed that the project could meet the demand for strategic minerals.
The team said in their note to clients:
A US-centric asset portfolio (Golconda and White Caps) provides growing exposure to both precious metals (gold and silver) and critical metals gallium and antimony, both of which are being increasingly recognised as strategic commodities by the US given their importance across semiconductor, AI and defence related supply chains. We view the underlying gold exploration potential at Golconda to be capable of supporting meaningful resource growth over time, while the greater gallium and antimony exposure may provide optionality from both a strategic funding and permitting perspective as the US increasingly prioritises domestic critical mineral supply chains independent of China.
Morgans has a price target of $2.14 on G50 shares, compared to the current price of 79.5 cents.
The shares have traded as low as 11 cents and as high as $1 during the past 12 months.
G50 Corp is valued at $162 million.
