De Grey Mining’s share price (ASX: DEG) ended at the high of the day, up 3.16% at $1.80. The year-to-date gain of 45.93% has offered a significant outperformance on the Australian markets through 2024, with eyes now turning to the outlook and forecast in the upcoming year.
A couple of analyst adjustments in recent times give us an insight into what the street sees for 2025, as UBS reaffirmed its Buy rating on De Grey Mining shares with a price target of AUD2.20. This endorsement comes as UBS acknowledges the promising early-stage results from the Hemi Gold project, which suggest the potential for underground mining operations.
The Hemi Gold project has indicated production rates between 200,000 and 250,000 ounces per annum. This projection is based on estimates suggesting the processing of 4-5 million tonnes per annum. Such figures highlight the potential scale and capacity of the project.
Furthermore, a Detailed Feasibility Study related to the Hemi Gold project has been conducted. According to this study, there is an estimated initial 12-year production period, potentially yielding around 530,000 ounces per annum. This forecast reinforces the project’s significance to De Grey Mining’s future prospects.
Earlier this month, RBC Capital offered a mixed view, with the $2 price target revised up from the previous $1.80, but the rating dropped to Sector Perform, from Outperform.
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In terms of its broader market strategy, UBS believes there is still room for competitive bids for De Grey Mining’s shares, which could include partial cash offers. This perspective suggests that the company’s current market valuation might attract interest from other parties, providing strategic opportunities for investment.
The approval of De Grey Mining’s activities, particularly with the Hemi project reflects a potentially positive year ahead for the company. Whilst price targets are notoriously changeable, the current consensus at $2.15 reflects a healthy potential upside of almost 20% from the recent close. Whether De Grey Mining can operationally hit the metrics indicated in their report will likely play a big part of the story, but for the time being at least there seems to be some bullish momentum carrying through into the new year.
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