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Bardoc Gold: Digging Into The Updated Pre-Feasibility Study

Jun. 07, 2020 3:49 PM ET11 Comments
Taylor Dart profile picture
Taylor Dart


  • Bardoc Resources released a positive Pre-Feasibility Study earlier this year for its Bardoc Gold Project in Western Australia.
  • The study envisions average annual gold production of 135,000 ounces at all-in sustaining costs of $824/oz, with a very modest initial capex.
  • Based on the company's current market cap, it is being valued well below the peer average from an enterprise value per ounce standpoint.
  • Given the relative undervaluation with the company valued at barely US$80 million with solid project economics even at $1,500/oz gold, I see the stock as a speculative buy below A$0.08.

It's been a rollercoaster ride of a year for the Gold Juniors Index (GDXJ), with many sub $1-billion market cap juniors having their most volatile year in over a decade with the mid-March financial market turbulence. Fortunately, some of the better names in the sector have emerged from the rubble relatively unscathed, with the Australian miners leading the pack as several miners hit new all-time highs. One name in the industry that hasn't fully recovered yet is Bardoc Gold [BDC:ASX], even though the company released a Positive Pre-Feasibility Study in Q1, with robust economics and very modest initial capital expenditures. Using a conservative gold price of US$1,500/oz, the After-Tax NPV (8%) to Initial Capex Ratio comes in at 1.93, a solid figure, given the high discount rate used on the project. However, despite the impressive study released to the market, Bardoc Gold is trading below US$30.00/oz, and barely 0.3x P/NAV. Based on this undervaluation, combined with attractive economics in a Tier-1 jurisdiction, I see the stock as a speculative buy below A$0.08. All figures in this article are in US dollars at an exchange rate of 0.69 Australian dollars to US dollars, unless otherwise noted.

(Source: Company Presentation)

Bardoc Gold released its maiden Pre-Feasibility Study (PFS) for its Bardoc Gold Project at the worst time possible on March 17th, while financial markets were busy falling off a cliff. Despite the unfortunate timing of the announcement, the project economics outlined in the PFS were quite robust, with average annual gold production of over 135,000 ounces at all-in sustaining costs below the industry average of US$980/oz. Even more impressive, the study suggests very modest initial capital expenditures of just US$100 million to build the mine, and the project economics are outstanding, even when using a conservative gold price of $1,500/oz. Let's take a closer look at the company for those unfamiliar with Bardoc Gold, before

This article was written by

Taylor Dart profile picture
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Analyst’s Disclosure: I am/we are long GLD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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