• Canaccord Genuity believes Spartan’s Never Never deposit could host +1.5Moz of gold
  • Broker anticipates first production could begin in 2H FY2025 and placed a speculative buy recommendation on the Simon Lawson-led company with a 75c price target
  • Euroz Hartleys is even more confident, suggesting more rich gold intersections could be coming from Never Never
  • It has also issued a speculative buy recommendation with a more aggressive 90c price target


Special Report: Spurred on by the latest drilling results, which include multiple double-digit width and grade gold intersections, Canaccord Genuity believes Spartan Resources’ Never Never deposit could grow to +1.5Moz in size.


This confidence appears to be well-placed given the top intersection of 11.55m @ 36.77g/t gold in the latest drilling is not only the deepest to date, but also the third best gram X metre intersection seen at the deposit thus far.

Ongoing drilling also expanded mineralisation at the Never Never deposit to ~830m vertical depth and ~1km down-dip of the current 952,000oz resource.

Never Never already underpins growing resources at Spartan Resources’ (ASX:SPR) flagship Dalgaranga project in WA’s Murchison region and looms as integral to any plans to restart the existing carbon-in-leach processing facility located on-site.


Big growth potential

Given the latest strong drill results, Canaccord attributed the potential for Never Never to grow to +1.5Moz to the broadening orebody and increasing grade at depth.

“With the current underground resource averaging ~1,700ozpvm (ounces per vertical metre), assuming mineralisation extends ~200m below the current resource, equates to an additional 340,000oz,” it noted.

“Using the lower 150m (600mRL-750mRL) average of ~2,000ozpvm this increases to 400,000oz. We highlight this may prove conservative if grades continue to increase at depth.”

Small wonder then that Canaccord has rated SPR as a ‘speculative buy’ with a price target of 75c, well above the company’s current price of 62c.

This valuation is based on a base case production scenario using the Never Never open pit/underground and Gilbey’s open pit ore to support a 1.7Mtpa processing rate to produce 136,000oz per annum at an all-in sustaining cost of $1,616/oz.

“We currently assume first production in 2H FY2025, with Never Never underground accounting for 75% of the ounces produced over a seven-year mine life,” it added.

“We assume restart capex of $120 million, which incorporates a mill upgrade (addition of secondary crusher), pre-production underground development, paste plant and cutback on the Gilbey’s pit.”

Canaccord added that while its assumptions would likely evolve as SPR moves towards a final investment decision, it was comfortable with the level of conservatism built in its valuation, particularly if additional underground mines are defined.


‘Just when you thought it couldn’t get better’

If Canaccord is upbeat about the upside potential of SPR, Euroz Hartleys is downright ecstatic – noting that besides the deepest Never Never assay which also happened to be the third best intersection returned to date – another hole, DGRC1392-DT, had identified Never Never-like mineralisation over 35m.

Notably, this has the same mineralisation description as the high-grade areas of DGDH 052 (4m @ 101g/t gold), leading Euroz to ask if the best results were still to come.

“It may be a geologist’s dream to find a deposit like this, but it is a mining engineer’s dream to mine it,” Euroz said.

“SPR continue to find high-grade gold within 600m of the 3Mtpa Dalgaranga mill.

“With minimal capital required to get the operation back into production($70-$100m), high grade feed (+2.2g/t) and visibility this could be an asset capable of supporting a 10+ year mine life, we believe SPR is a compelling opportunity for gold investors.

“This is the highest-grade gold story since BGL for a fraction of the price (and without the production risk).”

While maintaining its own ‘speculative buy’ recommendation, Euroz has gleefully increased its price target up from 70c to 90c per share, largely based on the opportunity to find more resources close to an existing mill.



This article was developed in collaboration with Spartan Resources, a Stockhead advertiser at the time of publishing.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.