Argonaut publishes KAU report with a 43c price target
Yesterday, Argonaut published a research report on KAU with a price target of 43c.
KAU is currently trading at ~16c so the report is a really good way of gauging the potential upside in KAU’s share price.
The research note mainly centred around KAU’s acquisition of the Henty gold mine in Tasmania.
Henty was previously a cornerstone asset of ~$1BN capped Catalyst Metals (who is going to become a 19.99% shareholder in KAU post transaction).
KAU’s acquisition immediately adds ~25k ounces per annum of production to the company’s operations.
Combined with KAU’s Victorian assets, KAU is looking to ramp up it’s projects to group wide production of ~50k ounces per annum.
We think it’s a well timed, step change to KAU’s operations.
IF the gold price can stay at these levels or go higher then it could pay off nicely for the company.
(the gold price is up almost A$200 per ounce already since that deal was announced…)
We covered the acquisition in detail here: $83M KAU to become a 30,000 oz per year gold producer. Gold at all time highs…
What’s next for KAU?
In the short term we want to see two things:
Acquisition of the Henty Mine in Tasmania finalised
Milestones:
✅ Capital raise
🔄 Shareholder vote to approve the transaction
🔲 Transaction completed
Exploration drilling and increased production at the A1 Mine in Victoria
Milestones:
✅ Drilling commences
🔄 Drilling results
🔄 Decline construction progress
🔄 Mining of virgin ground commence
🔲 Increased average gold grade processed
After the next round of quarterlies, it will be all about increasing production from KAU’s producing projects.
We think the June and the September quarterlies will be the big catalysts once the Henty acquisition is all completed.
