Special Report: Investors can hedge their bets by finding company directors with “skin in the game”.

One example of such a company is De Grey Mining (ASX: DEG), an Australian gold explorer with near-term development prospects in one of the world’s best mining jurisdictions – the Pilbara region of Western Australia.

Experienced chemical engineer Peter Hood, who joined the board in November last year, doubled his De Grey shareholding this week.

Mr Hood now owns 1 million shares following a $49,109 on-market purchase.

It’s usually taken as a good sign that directors who invest their own cash are confident in their company’s prospects.

For De Grey, that confidence could be attributed to the fact that it’s set a target to define a minimum two-million-ounce gold resource by the end of the year.

Its already increased its Pilbara gold project development study from 1 million tonnes per annum (Mtpa) to 2Mtpa.

This could potentially boost De Grey’s vision of annual gold production from 65,000 ounces, as published in its2017 Scoping Study, to beyond 100,000 ounces.

Mr Hood is not the only De Grey director who has recently upped their stake.

In December, executive chairman Simon Lill and directors Andy Beckwith and Steve Morris exercised their listed and unlisted options.

They collectively contributed a substantial ~$500,000, with a further ~$225,000 contributed by other management and employees.

Financing and marketing specialist Red Cloud Klondike Strike recently released a report citing its belief that De Grey has “room to grow, a lot”.

“In our view, De Grey is one of the few development companies with a path to produce plus 100koz/year, have exceptional exploration upside in +200km of shear zones and trading at a steep discount to its peer group,” the report stated.

Red Cloud believes that the Pilbara gold project is of a scale and has the exploration upside that makes De Grey an “attractive target for mid-tier producers.”

De Grey is currently trading at 9.6c, giving it a market value of about $40m.

But the Red Cloud Research Report considers that the junior explorer is worth more like 30c per share, which equates to a current market value of about $127m.


This story was developed in collaboration with De Grey, a Stockhead advertiser at the time of publishing.
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