Barton Gold

Overview
Price performance
Financials
Research
Thematics

Barton Gold is an Australian gold developer with 100% ownership of the only regional gold mill in the renowned central Gawler Craton of South Australia. Currently, it has JORC mineral resources of c 1.6Moz Au and is targeting future gold production of c 150,000oz annually.

We estimate that Tunkillia’s pre-tax NPV (7.5%) of A$512m translates into a post-tax one of c A$322.6m, or A$1.48/share. Based on EV/NPV multiples and adjusting for PEA stage of development, sovereign risk and the overall risk of commerciality, this translates into a value of A$0.42–0.50/share, which is similar to the A$0.51/share NPV (10%) of dividends if the company were to raise equity to develop the project at the current share price. In the event that Barton is able to extend its operations’ lives indefinitely via exploration, however, we calculate that a valuation in excess of A$2.50/share is possible.

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Metals & Mining |
Initiation

02.09.24

Barton Gold — Special by name, special by nature

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Sector

Metals & Mining

Equity Analyst

Lord Ashbourne

Director of Content, Mining

Key Management

Alexander Scanlon

CEO

Balance Sheet

Forecast net cash (A$m)

10.2

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
%	1M	3M	12M
Actual	16.7	12.0	14.3
Relative	15.7	8.7	(4.8)
52 week high/low	A$0.3/A$0.2

Financials

Barton’s initial scoping study on the Tunkillia project posited a 5Mtpa bulk open-pit mine operating over 6.4 years to generate an internal rate of return (IRR) of 40% at a gold price of A$3,500/oz, average all-in sustaining costs of A$1,917/oz and initial capex of A$374m. This puts it well on the road to executing its three-phase development strategy to achieve c 150,000oz in near term annual gold production.