Disclaimer: IRL I participated in the placement (skewed mostly to tranche 2) and did a little work with one of the JLMs on the deal.
Broadly, the White Dam restart plan and exploration strategy has the potential to support a mining and processing operation that can produce 20-25kozpa for 5yrs+ with upside from copper credits.
Under phase 1 of the White Dam restart plan, recrushing of the top bench is expected to commence and start producing gold in 1Q CY26. Phase 1 is modelled to produce ~4.2koz over 12mths and generate ~$10m in CFs based on A$5500/oz or ~$11.5m at A$6000/oz.
Phase 2, which brings in fresh ore from the Hannaford, Vertigo and White Dam North deposits, remains on track to commence mining and processing in 1Q CY27. Drilling is expected to commence shortly with 2 RC rigs drilling ~30km and will predominately be focused on resource definition to support resource updates and pit optimisations to underpin the Phase 2 mine plan. Drilling and assays are expected to be completed by March 2026, followed by resource and optimisation updates into mid CY26. Permitting will commence shortly thereafter in which I think permitting should be relatively straight forward given the project area is already disturbed, and these deposits have been previously mined. The timeline gives PGO a buffer to deliver first ore in early CY27.
Phase 2 is the step up towards higher production levels and ongoing CF generation, and is expected to produce ~40koz+ (~20kozpa) of gold for ~$75m+ in CFs based on A$5500/oz or ~$95m+ at A$6000/oz. This brings the potential total CFs of Phase 1 & 2 to ~$85m and ~$105m at A$5500/oz and A$6000/oz respectively. At PGO’s current fully diluted mcap of ~$27m implies a gold price A$4150/oz whilst breakeven is ~A$3500/oz on our modelling.
The market is not pricing in much success at rebooting White Dam, so I see progress on execution, production and demonstrating CFs as the key ongoing catalysts for re-rating PGO over the next 12 months.
Beyond the immediate plans of Phase 1 & 2, PGO is strategizing on Phase 3 which aims to build the LOM beyond 3yrs at a production profile of 20-25kozpa. The key sources supporting a LOM extension are Mary Mine (ET of 30koz+) and a successful tender for Mana Hill (ET of 130koz+, historical Newmont inferred resource of up to 320koz) in which I think PGO is a frontrunner for. It was noted that with new ownership and a clear path to producing again that engagement for prospective deals is opening up and that M&A could be a feature of building up the longer term LOM plan at White Dam. See our prior sales note for a more detailed breakdown of regional exploration potential.
An angle of optionality that is not well considered is the copper potential that White Dam offers as the operation has SART plant which is used to manage copper and has previously produced a saleable copper product. Our follow on research has focused on understanding the parameters around producing saleable copper. At this stage, I think there is scope for White Damn to produce $5-15m of additional CFs from copper credits under Phase 1 & 2. Under Phase 3, deposits such as Mary Mine have much higher copper grades thus the longer term mine plan could see a higher level of copper production on top of the gold.
Further optionality exists from exploration at Alice River, White Lion and St George. I think the latter two have a little more excitement given they are earlier stage exploration targets that offer a greenfield level kicker in the event exploration is successful.