Finding a lightly-capitalised growth story in the ASX gold space is tougher than ever.
The Aussie dollar gold price of more than $1,730/oz and the on-average margins of $700/oz which that offers up for those with near-term production potential has kind of made sure of that.
But there are still a few out there which for one reason or another have been overlooked. NTM Gold (NTM) is a case in point.
It is trading at 4.5c for a market cap of all of $15 million, which is pretty much the value of your average gold explorer nowadays without any resource ounces in the bank.
But in NTM’s case, its Redcliffe project, 45km north-east of Leonora in WA’s North-Eastern goldfields, comes with a resource base across two deposits of 277,000oz (5.48mt at 1.57 grams of gold a tonne).
That’s been the case since 2012, which explains why the stock has been overlooked in recent times, notwithstanding NTM’s ground position covers some 40km of the gold-pregnant Mertondale shear zone (MSZ).
Find the kinks and wobbly bits in the MSZ and you’re more than likely to come across a blanket of oxide gold mineralisation covering higher-grade shoots which head down to who knows where.
NTM has probably got another 20km or so of the MSZ to test and the deposits outlined to date are open along strike and at depth. It’s been busy too in recent times and last year added the Bindy deposit to its collection.
Still no resource upgrade. But one is coming, probably around mid-year.
At its current market value, NTM is trading at lower end of the $50-$90/oz enterprise value-to- resource-ounce the market uses as a rough valuation tool. So it can be said there is nothing in the share price for the coming resource upgrade.
There’s no point in guessing what the new resource figure will be. What can be said is that there has been a lot of drilling since 2012 across three deposits – Nambi, GTS and Bindy – and that there is obviously going to be a maiden estimate for Bindy.
Don’t expect the magical 1moz with the update. But given prospectivity of the MSZ and the yet to be closed-off existing deposits, there is good reason to be believe that 1moz is not an unrealistic medium-term target.
Plus, Encounter Resources’ enviable JV with Newcrest leaves it highly leveraged to exploration success. Read more +
