Astral Resources NL (ASX:AAR) is poised for value growth as potential future labor shortages challenge underground mining, boosting the appeal of the company's open-pit projects capable of sustaining production above 100,000 ounces of gold per year for over a decade, Euroz Hartleys said in a Monday note.
Euroz notes that Gold Fields' St Ives mine, located 45 km from Astral's projects, in Kambalda, Western Australia, could be effectively brought closer by reducing the haulage distance to 25 km using dirt roads.
Although Kambalda shows signs of decline amid weak nickel and lithium prices, Euroz sees opportunity in the region, citing its strong infrastructure and ample staff accommodation.
Astral has allocated over 5,000 metres of drilling to explore extensions along strike from Wattle Dam, at the Spargoville project, with a drill rig set to mobilise imminently, Euroz noted.
While it's too early to quantify the exact amount of gold, Euroz believes there is high-grade gold mineralisation yet to be unlocked in the area.
Euroz now sees scope for the company's assets to produce more than 120,000 ounces of gold per year.
Euroz Hartleys maintained Astral Resources' speculative buy target and AU$0.30 price target.
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