Major brokers home in on Musgrave in the lead up to bigger resource at Cue gold project
Major broking houses have high hopes for Musgrave Minerals as the company closes in on a resource upgrade at its Cue project in WA’s fertile Murchison region.
Both Canaccord Genuity and Euroz Hartleys expect Musgrave Minerals (ASX:MGV) will comfortably be able to add around 150,000oz of near-surface open pitable gold to grow the Cue resource to roughly 800,000oz in the near term and break the milestone 1Moz mark by the end of 2022.
Canaccord analyst Paul Howard said in a recent update that he believed Musgrave could deliver somewhere in the region of 800,000oz in the upcoming June quarter 2022 interim resource update, which will focus drilling efforts down to 100-120m below surface at the new White Heat-Mosaic and Big Sky discoveries.
“Over time and with the inclusion of deeper drilling, we see 1Moz as a realistic goal in [the second half of 2022],” he noted.
Musgrave has a strong track record of discovery and value creation since acquiring 100% of the Cue Project in 2017. The company has discovered multiple new deposits, including the high-grade Starlight lode and recent White Heat-Mosaic discoveries along the Break of Day trend and the Big Sky discovery just 2km to the south-west.
Euroz Hartleys resources analyst Michael Scantlebury said Musgrave already had a high-grade resource base of 616,000oz at 3.5 grams per tonne (g/t) gold, consisting largely of Break of Day (262,000oz at 10g/t) and Lena (325,000oz at 2.3g/t).
“We see potential for +800,000oz total in the next update, building towards the +1Moz target by CY22 end,” he noted in a research note last week.
Musgrave’s last resource update was in November 2020 and the company has had multiple drill rigs working towards a new resource update due out in the next few weeks.
The company’s current plan is to continue to grow the resource post the June update to over 1Moz gold by January 2023.
“Musgrave has an excellent track record of discovery success at Cue, with a historical discovery cost of approximately $30/oz gold,” managing director Rob Waugh told Stockhead.
“This is not only well below the global greenfield average of $US45/oz (~$64/oz) but the gold ounces at Cue are near-surface and high-grade, so highly sought after, making the value of these ounces significantly better than the industry average.”
Euroz Hartley’s Scantlebury says the market pays a premium for high-grade gold, especially when the mineralisation is shallow and extending at depth, particularly in WA.
Musgrave continues to unlock “some of the best” near-surface, high-grade gold in WA’s mineral-rich Yilgarn.
In March, the company revealed it had hit up to 105.4g/t gold at just 20m from surface at the recently discovered Mosaic Lode.
The Mosaic lode, which is located south of the equally high-grade White Heat prospect, previously delivered a top grade of 381g/t from 74m.
The target is hosted within the same high-titanium basalt stratigraphy that also hosts the Break of Day deposit 300m to the north – one of the highest-grade near-surface, undeveloped gold deposits in Australia.
Few undeveloped gold resources in Australia carry as high a grade as Break of Day.
This article was developed in collaboration with Musgrave Minerals, 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.