Emmerson Resources' (ASX:EMM) White Devil deposit, part of its Tennant Creek Mineral Field in the Northern Territory, is poised to deliver significant gold royalties and potential production exposure, following a 25% increase in its mineral resource estimate (MRE), according to a Wednesday note by Euroz Hartleys.
On April 15, the company lifted resource estimates at White Devil to 4.6 million tonnes at 4.2 grams per tonne gold, for a total of 611,400 ounces.
The result exceeded expectations, with contained gold ounces up by 25% and resource tonnes up 28%, while maintaining grade, Euroz said.
White Devil is expected to become Emmerson's first "Major Mine", potentially shifting the company from a royalty-only model to a 40% ownership stake, pending scoping study approval, Euroz added.
Euroz said Emmerson is well placed to earn 6% royalties on smaller deposits while gaining production exposure on larger ones like White Devil.
The broker also flagged White Devil's surface-accessible, high-grade ore as a low-capex opportunity for staged open-pit and underground development.
Euroz believes that Emmerson is a compelling investment case with takeover potential given its growing inventory, infrastructure access, and near-term cash flow prospects.
The firm maintained Emmerson's speculative buy rating but raised its price target to AU$0.25 from AU$0.20.
Shares of the firm rose 7% in recent Thursday trade.
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