Canaccord cranks up Ausgold target to $1.65 on “compelling” Katanning DFS

Canaccord Genuity has upgraded its price target for Ausgold to $1.65 following a “compelling” DFS for its Katanning gold project.

Canaccord has increased its price target for Ausgold to $1.65 following the release of the Katanning gold project DFS. Pic: Getty Images

• Canaccord maintains speculative buy rating for Ausgold and ups price target to $1.65 from $1.60

• DFS for Katanning gold project described as highlighting “compelling development merit”

• Potential for satellite ore sources and other early-stage targets to sustain initial 140,000ozpa production

Special Report: Canaccord Genuity has upgraded its price target for Ausgold just weeks after initiating coverage after the company released a definitive feasibility study outlining strong economics for its Katanning gold project in WA.

In June 2025, Canaccord slapped a speculative buy rating with a price target of $1.60 per share on the company saying a management change-out in 2024 gave it an “excellent blend of experience” that could bring the Katanning project to fruition.

It also reflected modelling that Ausgold’s (ASX:AUC) Katanning project could support a 3.6Mtpa operation producing 118,000ozpa at an AISC of $2326/oz over a 10-year mine life.

The now released DFS has clearly met and possibly exceeded Canaccord’s expectations with the broker saying it “highlights compelling development merit”, a finding that warranted an increase in the price target to $1.65 – well above the current share price of circa 68.2c.

AUC envisions Katanning as a 3.6Mtpa carbon-in-leach operation delivering average annual production of 140,000oz over the first four years and 1.14Moz over the initial 10-year life of mine.

Using a fairly modest gold price of $4300/oz, this will generate post-tax cashflow of A$1.37Bn and IRR of 53% at an AISC of $2180/oz over the first four years and $2265/oz over the life-of-mine.

At the current spot price around the $5000/oz mark, projected post-tax cashflow would increase to $1.91Bn and IRR to 68%.

In line with expectations

Canaccord analysts led by gold expert Tim McCormack said the DFS outcomes were “in line with our expectations” in its initiation note.

It added that AUC had released an updated resource of 69Mt at 1.11g/t, or 2.44Moz of contained gold, that is now economically constrained to a $4500/oz optimised pit shell instead of the previous depth constraint.

McCormack said this provided “a more robust, reliable and de-risked resource”.

“We highlight that 90% of the total resource is contained within one open pit, supporting simpler mine planning and more efficient scheduling,” he added.

Canaccord also noted the company’s ongoing grade control program that could cover the first 18-24 months of production was extremely positive for the project as it de-risked it markedly.

“Further, AUC notes that initial grade control drilling is positively reconciling against the resource/reserve,” McCormack said.

Watch: John Dorward joins Stockhead TV

Growth and next steps

Canaccord noted the results from ~12,000m of drilling undertaken in late 2024 and early 2025 as part of the infill grade control and extensional drilling program in the Central and Southern Zones had not been incorporated into the resource update.

“It is anticipated that this drilling will inform the next resource update in early CY26,” it added.

Additionally, the company will carry out drilling targeting open pit and underground growth opportunities in the Central Zone along with an aggressive exploration program across its large regional tenement holding surrounding the Katanning project.

An oblique view looking SW at the Central Zone. Pic: AUC

The latter is aimed at discovering satellite ore sources for the project with the goal of extending mine life.

Canaccord added that along with numerous other more early-stage targets across the under-explored greenstone belt, this could enable the ~140,000ozpa production rate during the first four years to be sustained for longer.

Early engineering works – including front-end engineering and design that will allow ordering of long-lead items – will also be carried out in advance of a final investment decision, which is expected to be made in mid-2026.

Construction is expected to take 18 months following FID with first gold targeted for the end of 2027.

This article was developed in collaboration with Ausgold, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Canaccord cranks up Ausgold target to $1.65 on “compelling” Katanning DFS