Big Ridge Gold released an updated Mineral Resource Estimate (MRE) today, significantly increasing gold ounces by 51% to 1.44M oz. Au. The Hope Brook deposit is now the second largest gold resource in Newfoundland next to Marathon Gold ($425M market cap). Hope Brook has over 1MM oz in an open pit at 2.14 g/t Au. And over 400,000 oz. Au in an underground resource and the deposit remains open for expansion. Hope Brook has 10 years of production history which eliminates metallurgical risk, and it remains connected to grid power. The Hope Brook gold project has hit critical mass and is likely to become one of Newfoundland’s next gold mines.
Big Ridge is trading at deep discount to its peer group which is at $51/oz. in the ground. Based on the updated resource and $51/oz. valuation BRAU should be trading closer to $0.43 per share and this excludes the Destiny Gold Project in Quebec that has >600k oz. Au in resource. Including Destiny and BRAU should be at $0.65 per share to be in line with peers. As I have stated for several weeks now, the company’s market capitalization was grossly undervalued given the two projects and before this updated resource. Therefore, it’s market cap remains too low.
But I suspect with this new resource, that won’t last long.
