Weekly Reports | 10:00 AM
A veritable smorgasbord of silver and gold ideas as broker initiate coverage on smaller cap ideas, while Mineral Resources receives a thumbs down.
- Moelis highlights Black Cat’s transition from explorer to emerging producer
- Canaccord backs silver Developers Sun Silver and Unico
- Jarden cautious on Mineral Resources despite Posco JV boost
By Danielle Ecuyer
This week's quote comes from NAB Economic and Markets Research
"We now see the RBA on hold at 3.6% through to the end of our forecast horizon (previously we forecast a 25bp cut in May). Underlying inflation will print above 3% in the near term and will remain above target for at least another 12 months.
Growth has accelerated and the economy is already exhibiting signs of elevated capacity utilisation. The acceleration in house price growth and investor lending also argues for stable policy at a minimum. For the RBA the appropriate stance will be to remain broadly around neutral, for now."
An emerging gold producer with lots of growth potential
As the gold rush continues, Moelis turns its focus on a leveraged emerging producer with assets in Western Australia, Black Cat Syndicate ((BC8)). It is a relatively new business, listing on the ASX in November 2017.
Black Cat owns multiple assets and is emerging as a producer, with the analyst forecasting around 90koz of gold in FY26 and over 120koz in FY27 as the recently acquired (February 2025) Kal East reaches steady-state throughput.
The company operates the Paulsens underground mine in the Ashburton region, which once was a foundational asset for Northern Star ((NST)) and acquired in early 2022 under care and maintenance.
Paulsens has gold reserves of 4.3mt at 4g/t for 548koz and historically produced around 75kozpa (1,003koz at 6.9g/t mined), with Black Cat producing first gold poured in December 2024 post-refurbishment works. This was the stage when the business moved to producer.
Kal East has gold reserves of 18.8mt at 2.1g/t for 1,294koz with historical production of around 600koz, with Black Cat acquiring the Lakewood Mill from Westgold Resources ((WGX)). Management is now concentrating on ramping up ore supply to the Lakewood Mill.
The Mt Clement project, which is near Paulsens and early stage, hosts around 14kt antimony, one of the largest deposits in Australia, as well as silver, copper, gold, and lead.
At the northern end of the border between Western Australia and the Northern Territory, Black Cat owns the Coyote project, which is in care and maintenance.
There is potential to restart the project given the infrastructure and over 600koz of gold resource at 5g/t-plus. Moelis highlights this would offer similar annual production output to Paulsens at what is believed to be an attractive capex per ounce of gold.
Given the miner’s limited track record and the ramp-up of both Paulsens and Kal East, Moelis emphasises the higher-risk nature of the stock relative to its larger ASX peers under coverage.
The balance sheet is described as robust with no debt and $53m in cash at the end of September, up over $18m on the previous quarter.
At current share price levels, the valuation is considered “undemanding”. Black Cat is initiated with a Buy rating alongside a $1.60 target price.
New silver ideas with large resources in positive locations
Canaccord Genuity initiated coverage on two silver companies, Sun Silver ((SS1)) and Unico Silver ((USL)), both with Speculative Buy ratings.
Sun Silver is developing the 100%-owned Maverick Springs silver and gold project in Nevada with a reported 480Moz grading 68g/t silver equivalent.
Nevada is known to host large-scale, low-grade gold and silver mines due to its geology of normally soft carbonate host rocks, with a good mining code and modern infrastructure in place.
The analyst highlights resource grades at operating mines average 0.64g/t silver equivalent, which represents an opportunity for Sun Silver’s resource as the third-largest undeveloped silver asset in the US.
In addition, the US government has made silver a strategic industrial and defense material, viewed as important for clean energy, electronics, and aerospace.
Canaccord’s base case forecast assumes 97mt at 50g/t silver equivalent (50% resource conversion), which supports a 10-year, 10mtpa open-pit mine with a 3-to-1 strip ratio.
Target price is set at $2.20, with every 10% movement in the silver price implying a 30% change to the target price, such is the sensitivity to the spot price.
Unico Silver, also rated a Speculative Buy, is an emerging silver developer aiming to become the next leading ASX-listed silver company via development across its landholdings in Santa Cruz, Argentina.
The developer has a 231Moz at 152g/t silver equivalent resource base, with a recent 161g/t at Cerro Leon, a rise of 73% on 2023, which has been achieved at a very low discovery cost of US$0.10/oz.
A further estimated 73Moz silver equivalent is held at Joaquin, which is partly mined but could lift global resources beyond 300Moz silver equivalent, with a maiden resource at Joaquin expected in the current quarter of 2025.
Strategically, the analyst outlines the two-pronged approach. The Plus 150 plan focuses on quickly proving up 150 million ounces of easily processed, near-surface silver so the company can start early mine and project studies.
The Beyond 300 plan looks further ahead, aiming to find deeper sulphide deposits that could more than double the resource base and support a much bigger, longer-life operation.
Target price is set at $1.30.
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