DEG has reported a Conceptual Study Underground Study for Hemi assessing inferred material below Eagle and Diucon calculating 855koz of potential stoping material. Also included in the Study was an extrapolation of the Hemi MRE at depth which suggested 3.25Moz of potential additional endowment below the current MRE. Our high-level assessment suggests 250-300kozpa potential from the Hemi Underground once fully ramped to a 4-5Mtpa run rate. We have updated our model to include an initial underground mining inventory of 855koz which, combined with spot gold price increases, lifts our Price Target from $2.90 to $3.20. Buy Recommendation maintained. We note that the NST offer implies a price of A$1.83/share under the current metrics.
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