There are a lot of options for investors to choose from when it comes to ASX gold shares.
To help narrow things down, Morgans has just named three shares that it believes could be in the buy zone this week.
Here's what it is recommending to clients:
Image source: Getty Images
Horizon Gold Ltd (ASX: HRN)
Morgans has initiated coverage on this gold developer with a buy rating and $3.03 price target. Based on its current share price of $1.09, this implies potential upside of almost 180%.
The broker sees a strong re-rating opportunity as its flagship Gum Creek Gold Project advances towards production. It said:
We initiate coverage of Horizon Gold with a BUY rating and a 12-month target price of A$3.03 per share. HRN's flagship Gum Creek Gold Project is a simple, de-risked, free-milling open-pit development with robust DFS economics, a defined pathway to first gold and substantial resource upside beyond the current mine plan.
With the stock trading at a meaningful discount to our valuation and developer peers, we see a strong re-rating opportunity as Gum Creek advances toward first gold, targeted for 2H CY28.
Minerals 260 Ltd (ASX: MI6)
Another ASX gold share with significant upside potential according to Morgans is Minerals 260.
In response to funding news, Morgans has put a buy rating and $1.57 price target on its shares. This suggests that upside of just over 100% is possible. It commented:
MI6 has materially de-risked its funding position, securing an additional A$200m from Franco-Nevada (A$170m for a further 1.45% royalty plus a A$30m equity cornerstone) and raising A$250m via a two-tranche Placement at A$0.88ps. This lifts pro forma cash to ~A$601m (at quarter-end; incl. Tranche 2 and ~A$2m from the SPP), with the remaining funding to be met via project debt ahead of a targeted 1Q CY27 FID.
We model a ~A$330m debt drawdown, assuming moderate cost inflation to the PFS estimates, plus ongoing exploration and working capital. We maintain our BUY rating with a price target of A$1.57 per share (previously A$1.38).
Torque Metals Ltd (ASX: TOR)
A final ASX gold share that could be a buy according to the broker is Torque Metals.
Following the completion of an institutional placement, the broker has retained its speculative buy rating with a trimmed price target of 63 cents. This implies potential upside of approximately 270% over the next 12 months. It said:
TOR has completed a A$25m institutional placement at A$0.19ps, taking pro-forma cash to ~A$31m and funding an expanded exploration push across its >1,000km² Ritz Gold Project. The raise removes the balance sheet overhang that we think has capped the share price despite consistently strong drill results.
With funding secured, a high-quality 351koz (@ 3.1g/t Au) resource and a steady flow of growth-orientated drilling ahead, we see an attractive entry point. We maintain our SPECULATIVE BUY rating with a target price of A$0.63 per share (previously A$0.68).
