Shaw and Partners has released a bunch of new research reports this week, with two in particular catching my eye.
The companies they profile have the potential to deliver exceptional share price gains, the broker argues, based on new exploration drilling results.
Let's see who they like.
Image source: Getty Images
Brightstar Resources Ltd (ASX: BTR)
This gold project developer recently released new drilling results, which included an "exceptional wide, high grade intercept" of 226m at 3.11 grams per tonne of gold.
Brightstar said drilling at the Two Mile Hill-Shillington deposit was hitting broad intervals of mineralisation, "targeting areas identified for potential underground mining in ongoing pre-feasibility study workstreams, with visible gold observed throughout the significant intersections, typically associated with galena and pyrite''.
The company said drilling was continuing with rigs active across multiple deposits to bolster the prefeasibility work and continue extension at depth at Two Mile Hill.
Brightstar Managing Director Alex Rovira said:
These infill results are hugely encouraging for a potential future underground mining operation at Two Mile Hill, which is currently being assessed by Brightstar and Entech for inclusion in the upcoming pre-feasibility study. Prior to the recent discovery of the +300m-wide Shirvington Zone at depth, Two Mile Hill had already been identified as a potential large-scale underground mining operation, targeted to complement the proposed open pit mining in Sandstone. These infill results validate that concept, illustrating both grade and scale.
Shaw and Partners said Brightstar's projects were relatively low risk. They have a price target of $1.44 on the shares compared to 58 cents currently.
Yandal Resources Ltd (ASX: YRL)
Yandal recently reported further drilling results from its Arrakis discovery, which included 17.5m at 2.3 grams per tonne of gold and 17m at 1 gram per tonne.
The company's managing director, Chris Oorschot, said the results, "provide further support for a third high-grade domain within the Arrakis mineralised system, first defined after the 6m @ 28.3g/t Au intercept reported two weeks ago''.
Mr Oorschot added that an area beneath the current drilling remains untested, but that interpretations suggest a domain of higher grade mineralisation.
Shaw and Partners has a price target of 51 cents on Yandal compared to 15.5 cents currently.
The broker said:
We value YRL on a modest $180 per ounce and forecast 1Moz Resource base. YRL already has 450koz of Resource gold largely on existing mining leases, with strong extension potential and in the vicinity of multiple gold mills owned by other corporates. Further, ongoing drill results already suggest YRL has a realistic path to reach ~1Moz of Resources within a year. Upside to our price target could come from YRL's attractive ongoing exploration potential. Additionally, corporate optionality in the Yandal region could add further upside potential to our stock valuation.
