Freeman Gold Corp (FMANF) has received a new Buy rating, initiated by Echelon Wealth Partners analyst, Gabriel Gonzalez CFA.
Gabriel Gonzalez CFA has given Freeman Gold Corp’s stock a Buy rating based on several factors. The company’s Lemhi Project Preliminary Economic Assessment (PEA) has been seen to meet most anticipated project parameters, potentially revitalizing interest in the corporation. The project’s 11.2 year lifespan, low operational and jurisdictional risks, and average yield of 852 koz/year at a lifetime average of US$957/oz make it appealing for junior producers or potentially private equity firms seeking a levered position or entry into the gold mining industry. The only downside noted was a 50% capital expenditure (capex) cost inflation, which, while higher than expected, is in line with industry trends.
The financial aspects of the project also contribute to the Buy rating. The after-tax Net Present Value (NPV) of US$212.4M and Internal Rate of Return (IRR) of 22.8% using a gold price of US$1,750/oz, or US$295.6M and IRR of 28.6% using the spot gold price of US$1,932.50/oz, are promising. The project is set to produce an average annual gold output of 75,900 oz Au for a total lifetime output of 851,900 oz Au. Estimated lifetime cash costs are US$809/oz Au and All-In Sustaining Costs (AISC) of US$957/oz Au. Despite the potential challenge of raising capital for the project in the current market environment, Freeman’s positioning in a low-risk jurisdiction and promising permitting outlook suggest the potential for a market re-rating.
Gonzalez CFA covers the Basic Materials sector, focusing on stocks such as GoGold Resources, Silvercorp Metals, and Freeman Gold Corp. According to TipRanks, Gonzalez CFA has an average return of -18.5% and a 27.87% success rate on recommended stocks.
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Freeman Gold Corp (FMANF) Company Description:
Freeman Gold Corp is a Canada based mineral exploration and development company. The company primarily explores for gold. It is focused on the Lemhi gold project.
