Snowline Gold Corp.’s Valley Deposit: Significant Resource Growth and Resilience Support Buy Rating

Snowline Gold Corp. (SGD – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst yesterday. Analyst Brian Quast from BMO Capital maintained a Buy rating on the stock and has a C$17.50 price target.

Brian Quast has given his Buy rating due to a combination of factors including the significant increase in the Mineral Resource Estimate for Snowline Gold Corp.’s Valley Deposit. The updated estimate shows a 96% increase in Measured and Indicated Inventory, which now stands at 7.9 million ounces of gold. This substantial growth in resource size, along with the potential for further expansion and discovery of higher-grade gold zones, underscores the company’s promising prospects.
Additionally, the resource’s low sensitivity to cut-off grades suggests resilience against fluctuating gold prices and cost assumptions, enhancing its attractiveness. The updated model now assumes that the entire resource will be milled, which, despite leading to higher cash costs and all-in sustaining costs, still supports a robust project valuation. With a Preliminary Economic Assessment expected soon, these factors collectively contribute to the positive outlook and the Buy rating assigned by Brian Quast.

In another report released today, Scotiabank also maintained a Buy rating on the stock with a C$10.50 price target.