Barton Gold — Firing on all cylinders

Barton Gold (ASX: BGD)

Last close As at 09/05/2025

AUD0.67

0.12 (20.72%)

Market capitalisation

AUD147m

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Research: Metals & Mining

Barton Gold — Firing on all cylinders

As promised, on 5 May, Barton announced the results of its optimised scoping study on its Tunkillia project in South Australia. Relative to its initial scoping study (July 2024), capex was down 8.0%, while unit oxide and sulphide processing costs were 24.4% and 18.0% lower, respectively, as more realistic ore hardnesses were considered for grinding purposes. The life of the operation has been extended from 7.7 to 10 years, with the result that the amount of payable gold produced has increased by 13.1%. In conjunction with a 42.9% increase in the gold price to A$5,000/oz (c US$3,333/oz), these changes (among others) resulted in an increase in pre-tax project NPV7.5 of 176.6% to A$1,416m and an 33.2 percentage point increase in the internal rate of return to 73.2% (A$781m and 48.3% at A$4,000/oz Au, respectively). Using the same inputs, our financial model generates an NPV7.5 within 6% of Barton’s, from which we estimate a post-tax project NPV7.5 of A$895.9m, or A$4.09/share.

Lord Ashbourne

Written by

Lord Ashbourne

Director of Content, Mining

Metals and mining

Optimised scoping study results

12 May 2025

Price AUD0.670
Market cap AUD122m

A$1.5616/US$

Net cash at 31 December 2024

AUD6.8m

Shares in issue

218.9m
Free float 62.3%
Code BGD
Primary exchange ASX
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs 54.2 94.7 79.0
52-week high/low AUD0.6 AUD0.2

Business description

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 1.7Moz Au and is targeting future gold production of c 125,000–150,000oz annually.

Next events

Quarterly cash flow report

July 2025

FY25 results

September 2025

Analyst

Lord Ashbourne
+44 (0)20 3077 5700

Barton Gold is a research client of Edison Investment Research Limited

Note: PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.

Year end Revenue (AUDm) PBT (AUDm) EPS (AUD) DPS (AUD) P/E (x) Yield (%)
6/23 2.8 (5.7) (0.03) 0.00 N/A N/A
6/24 0.8 (9.4) (0.05) 0.00 N/A N/A
6/25e 8.3 (1.3) (0.01) 0.00 N/A N/A
6/26e 0.0 (9.1) (0.02) 0.00 N/A N/A

Production from as early as mid-2026

Barton will now commence a pre-feasibility study (PFS) and mining licence application at Tunkillia, while simultaneously developing its nearby Tarcoola project for ‘Stage 1’ production by leveraging its fully licensed Central Gawler mill to 20–30koz pa from as early as mid-2026.

Valuation: A$1.61–2.53/share risked; A$4.00 possible

As per previous reports, we value Barton’s Central Gawler mill at A$0.46/share on an ‘as new’ replacement cost basis and at A$0.23/share on an ‘as is’ indemnity value basis. Hence, this asset alone covers at least 40% of Barton’s share price. On top of this, as stated previously, at updated forex rates (A$1.5616/US$ cf A$1.6019/US$ previously), we estimate that Tunkillia’s (published) pre-tax NPV7.5 of A$1,416m translates into a post-tax NPV7.5 of c A$895.9m, or A$4.09/share, as a project on an unrisked basis (compared with A$417.5m, or A$1.91/share previously). Adjusting for stage of development (ie scoping study or preliminary economic assessment), sovereign risk and the overall risk of commerciality of the project (in the form of its internal rate of return), we calculate a value for Tunkillia in the range A$1.38–2.07 (cf A$0.54–0.65/share previously) based on EV/NPV multiples. At the current (real) price of gold of US$3,200/oz (A$4,997/oz), we estimate that the project could support an equity fund-raising at the current share price such that net debt:equity peaks at 2:1 and still return dividends to shareholders with an NPV10 of A$1.45/share (NPV7.5 of A$1.75/share). The optimised scoping study has flattened our estimates of Barton’s dividend profile somewhat. Nevertheless, if it is able to extend the lives of its operations indefinitely via exploration success, we calculate that a valuation of c A$4.00/share is possible.

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