Shares in Aurum Resources Ltd (ASX: AUE) have fallen just shy of 30% over the past 12 months, but according to the analysts at Bell Potter, that could be about to change.
They have released a new research report with a speculative buy recommendation on the company and a very bullish share price target, which I'll get to shortly.
Firstly, let's take a look at what's been making news for the company recently.
Image source: Getty Images
Excellent exploration results boosting confidence
Aurum on 1 October announced that it had hit the best gold intercept to date at its Boundiali Gold Project in Côte d'Ivoire.
The company received assays back from eight drill holes, with one returning an intercept of 28.8m at 22.9 grams per tonne of gold from a depth of 204m.
Aurum said the drilling also confirmed that the gold mineralisation at the site remained open.
The company is expecting to release a new mineral resource estimate for Boundiali in the fourth quarter of the calendar year, incorporating drilling that was completed in September.
This would be followed by a definitive feasibility study expected in late 2026.
The company currently has a mineral resource estimate of 3.22 million ounces of gold at Boundiali and 1.2 million ounces at its Napié Gold Project.
Aurum has a current cash balance of $95 million.
Aurum Managing Director Dr Caigen Wang said regarding the company's future plans:
This cash and our own diamond rig fleet places us in a strong position to advance drilling, studies and permitting concurrently at Boundiali. We received environmental approval in May and delivered the Pre-Feasibility Study and Maiden Ore Reserve in June. Our focus now is grant of the Mining Licences and completion of the DFS, with the goal of finalising funding and starting construction in early 2027, targeting first gold from Boundiali in the first half of 2028.
Aurum raised $52.5 million in September at 55 cents per share to progress its exploration program.
ASX gold shares looking cheap
Bell Potter said the company received "high-quality support" for the raise, including from Shandong Gold, which was a top 10 global mining company.
They added that strategic investors now accounted for about 25% of Aurum's share register.
Bell Potter said further:
AUE is one of the most successful gold exploration companies active in West Africa. Its management team has a demonstrated track record of discovery, resource growth, project construction, development, operation and divestment. AUE is well-funded, has outlined a compelling development project at Boundiali with substantial exploration upside.
Bell Potter has a price target of $1.45 on Aurum shares compared to 51 cents at the time of writing.
If achieved, this would constitute upside of 184.3%. Aurum is valued at $255.6 million.
