Doray Minerals (DRM) reported record June Q production at its Deflector Mine with 18.5koz Au and 818t Cu at an AISC of A$1,196/oz (versus 19koz @ A$986/oz in the March Q). Resources grew by 34% after incorporating the new Link and Da Vinci lodes at Deflector, adding ~180koz at around 18g/t Au which are yet to be incorporated into the mine plan or reserves. Cash increased to $30.7m and debt was reduced to $20.5m (from $27.5m in March Q). FY19 guidance was released with 80-85koz Au and 2,250-2750t Cu at an AISC of $1,050-1,150/oz), a 30% increase on FY18 output. Overall, the growth on multiple fronts has re-invigorated DRM’s appeal as a growth story trading on 5x FY19 PE and EV/Production of $1,900/oz. Flexibility in FY19 production, additional exploration success and an aggressive $10m exploration budget will continue to show further upside appeal in the short and medium term. BUY, TP $0.48ps (prior $0.41).
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