Minerals 260's (ASX:MI6) recent drilling at the Bullabulling gold project in Western Australia showed potential production beyond the current forecast of around 210,000 ounces per annum by increasing the throughput rate above 10 million tonnes per annum, Euroz Hartleys said in a note on Monday.
With 3 million ounces contained within the Indicated category at the project, the firm is forecast to be capable of defining an ore reserve of over 2 million ounces, given that it would only require around 66% conversion.
Euroz Hartleys modeled total pre-production capital expenditure of AU$550 million for a 5 million tonnes-per-annum processing plant, and factor an expansion to 8 million tonnes-per-annum in the fourth year, which would lift production to around 210,000 ounces per-annum at all-in sustaining costs of AU$2,506 per ounce.
The company is progressing towards first gold production in the December 2028 quarter. Euroz Hartleys had forecast 2029 for the first gold.
The investment firm retained its speculative buy recommendation and AU$0.93 per share price target on Minerals 260.