Tietto Minerals Ltd (ASX:TIE) is continuing to hit more high-grade gold at the Abujar-Gludehi (AG) deposit, part of its 2.2-million-ounce Abujar Gold Project in Côte d’Ivoire, with results of up to 3 metres at 17.16 g/t gold 150 metres below the existing resource.
The 3-metre interval in the ongoing diamond drilling program at AG was within 7 metres at 8.16 g/t from 440 metres with another strong result being 2 metres at 15.91 g/t from 233 metres.
Euroz has reiterated its speculative buy rating for Tietto and has upgraded the price target to 75 cents per share from 50 cents (current share price: 68 cents).
The following is an extract from Euroz’ research update:
Rampant Gold Market: Peer Comps Support higher Valuation
The gold sector is running: African peers are being priced (albeit at a significant discount to their Australian peers) at an average EV:Resource ounce of $90/oz. With results supporting an upgraded Resource of 3moz later this H, TIEs inventories support a Valuation closer to $0.73/ sh. Furthermore, strengthening A$ may see the valuation gap between domestic and offshore producers narrow. Ex-gold price collapse and/ or sovereign/COVID19 risks manifesting, we see little impediment to TIEs current trajectory. Drilling is active and newsflow commensurate. Economics are being matured: The development potential of TIEs flagship Abujar Project are taking shape. As we have seen with successful West African explorers, where a standalone development scale resource is defined, EV:Resource metrics will ‘gap-up’. We view that the current pace of activity can achieve this for TIE within the next 1-2yrs. Our Price Target increases to $0.75/sh. Speculative Buy remains.
- We have adjusted our Valuation of TIE to reflect the current universe of ASX listed gold explorers and developers;
- The African sub-set is currently being ascribed an average EV:Resource ounce of $90/oz:
- This remains a substantial discount to the domestic peers – we view that this arbitrage may narrow with continued strength in the A$;
- Regardless, the current peer average, acknowledging a strong gold market and emerging M&A (PRU acquiring ERX), warrants adjustment to our TIE Valuation;
- Given the on-going results including today’s announcement of high grade intercepts 150m beneath the current AG Resource, we view that the Company will near 3moz with the upcoming revised Resource;
- Our Valuation increases to $0.73/sh (prev. $0.50/sh) applying $90/oz (prev. $70/oz):
- We dilute for 79m options in the money (netting c.$15m of unpaid capital);
- Catalysts are ongoing:
- Ongoing Resource infill and extensional drilling for 4 diamond rigs;
- Resource update later this Q;
- Scoping Study being progressed in parallel;
- On-going metallurgical testwork;
- Sector M&A.
- We set $0.75/sh Price Target (prev. $0.50/sh) as a result.