Broker Upgrades: Strickland’s gold play heats up in Serbia, as Aura Energy eyes uranium boom

Strickland’s gold in Serbia’s got upside, while Aura’s Tiris Uranium project is set to grow – both speculative buys according to WA brokers.

Strickland Metals: Serbia gold play with big upside potential. Pic: Getty Images

• Strickland Metals: Serbia gold play with big upside potential

• Aura Energy: Tiris Uranium project poised for growth

• Both stocks are Speculative Buys with exploration potential

Strickland: A strategic gold play in Serbia

Canaccord Genuity (CG) has initiated coverage on Strickland Metals (ASX:STK) with a SPECULATIVE BUY rating and a price target of 16c, reflecting its potential in the gold and base metals space.

STK is trading 8c at the time of writing.

STK's key asset, the Rogozna Gold & Base Metals Project in southern Serbia, has recently piqued investor interest.

The project sits in a mineral-rich district with major players like Zijin Mining and Rio Tinto operating nearby.

Rogozna hosts a large-scale magmatic hydrothermal system, with significant gold and copper resources spread across four prospects: Shanac, Copper Canyon, Medenovac, and Gradina.

The Shanac deposit alone has a JORC inferred mineral resource of 130Mt at 1.1g/t AuEq, translating to 4.63Moz of in-situ metal.

"With drilling ongoing, we believe resource growth is highly likely across the project area," said the note out of CG.

CG has modelled two mining scenarios for Shanac:

The longhole open stope (LHOS) method, focused on higher-grade material, could produce 96,000oz per year at an average AISC of US$1635/oz AuEq, requiring upfront capital of US$250 million.

The sublevel cave (SLC) method, suitable for larger-scale mining, would produce 126,000oz per year with a higher initial capital cost of US$450m and an AISC of US$1675/oz AuEq.

"Both scenarios highlight the significant value already present in STK," CG noted.

In 2025, the company expects to deliver updated resources for Shanac and a maiden resource for Medenovac.

STK also has a strong cash position with $17.1 million in the bank as of September 2024, alongside investments valued at $26 million and no debt.

Strickland is still at an early stage, but the potential is there to see substantial value if its drilling campaigns hit the mark.

"With gold, copper, and strong exploration upside, STK is one to watch closely," said CG.

Speculative Buy on uranium stock, Aura Energy

Meanwhile, Argonaut has also kept its SPECULATIVE BUY rating on Aura Energy (ASX:AEE) with a price target of 35c.

AEE is trading at 14c at the time of writing.

The broker noted that Aura is making strong progress at its Tiris uranium project in Mauritania, with potential for significant production growth.

AEE recently reported a 49% increase in reserves at Tiris, now sitting at 62.8 million tonnes at 243ppm U3O8, containing 33.6 million pounds of uranium.

The company has outlined two expansion scenarios, which could see production rise to as much as 4 million pounds per annum, significantly boosting project economics.

These expansion plans also reduce AISC to around US$32/lb, down from the base case of US$36/lb, highlighting the potential for better margins.

All permits and licences are in place, and AEE is targeting a final investment decision in early 2025.

Once approved, construction will take 18 months, with first production potentially starting in 2027. At full ramp-up, production could reach 2.25mlbpa by 2030, said Argonaut.

The key to Tiris' viability is its beneficiation process, which upgrades ore from around 246ppm to 1500-2000ppm, improving profitability.

However, as Argonaut points out, there is risk at scale, and successful implementation of beneficiation will be crucial.

To fund this growth, AEE has raised $9m through an equity raise at $0.14 per share. Full development, however, will likely require $350m in debt and $150m in equity.

While Argonaut has lowered its price target by 13% to $0.35 due to increased dilution and lower uranium spot prices, the broker remains positive on Aura’s growth.

The major risks to the valuation, Argonaut said, are uranium price fluctuations and potential delays in construction or ramp-up at Tiris.

At Stockhead, we tell it like it is. While Aura Energy is a Stockhead advertiser, it did not sponsor this article.

Originally published as Broker Upgrades: Strickland’s gold play heats up in Serbia, as Aura Energy eyes uranium boom