D'oh! Almost three week old Broker research from Canaccord. Just...

1	D'oh! Almost three week old Broker research from Canaccord. Just incase anyone missed it, like I did. Updated on DEG website. Asset scale that has few peers Investment Recommendation
2	DEG continues to screen as one of the most exciting gold development companies on the ASX, in our view. Off the back of its impressive 6.8Moz maiden Resource at Hemi, which took total Resource at the Mallina Gold Project (MGP) to 9Moz, we turn our attention to potential Resource growth over the next 12 months and examine production and cashflow implications across various scenarios. The outcomes continue to support our view that MGP is rapidly emerging as a Tier 1 project, capable of supporting a +375kozpa production profile, at a time when peer gold producer assets are diminishing in quality. We maintain a SPEC BUY recommendation with a new price target of A$1.75/sh.
3	Hemi demonstrating +10Moz potential.We expect DEG to maintain its aggressive exploration program during FY22 (currently 12 rigs), and with relatively straightforward strike and depth opportunities across the deposits (Figure 1), coupled with the increasing geological understanding, impressive discovery rates (A$8.50/oz) and management Performance Rights (12Moz Resource target), we see Hemi alone becoming a +10Moz Resource in <12 months. That outcome would place the asset in an enviable group with respect to Australian peers, with only Boddington (15.5Moz including Reserves) and the Super Pit (16.8Moz in-pit) having larger open pit Resources. Importantly, we see the +10Moz Resource as achievable from extensions to the defined Resources, and with four known intrusions outside the Greater Hemi area, and up to 30 potential intrusions identified across the landholding, upside well beyond this estimate remains a realistic possibility. Upgrading our base case.We have made a number of refinements to our base case development and production assumptions for DEG's MGP. Key changes are driven by an increased assumed mining inventory (now 6.6Moz from 4.5Moz), larger processing facility (10Mtpa from 9Mpta) and increased total capex (A$900m from A$800m). The net outcome is positive for our valuation, and we now assume the MGP to support a production profile of 378kozpa at an AISC of A$1229/oz (previously 340koz at an AISC of A$1043/oz) for 16 years (previously 12 years). Notwithstanding the increased valuation, we still remain conservative on many of the key inputs and point to aspects like the project location, proximity to major sealed highways, gas pipelines, high voltage power lines, ample water supply and flat topography as all representing areas for capital and operating savings vs. our estimates. Flex tests and case study support our conviction.We have run scenario analysis across all the key modelling inputs (capital, grade, strip ratio, throughput, recoveries, mining inventory), which suggests a valuation range of A$0.90-A$2.50/sh and average FCF of A$370m pa. This highlights the realistic assumptions underpinning our base case valuation, and we also point to the limited downside (-22%) vs. upside (+122%) under bear and bull case scenarios. We have also completed a case study analysis on Gold Road Resources' (GOR-ASX: A$1.27 | BUY, A$2.05 PG, Tim McCormack) Resource and Reserve evolution from discovery to first production (Figure 12). The trend highlights the continued growth of the Measured/Indicated (M&I) Resources during the drill out and the high conversion of M&I to Reserves (84%) at the time of first production. Broadly speaking, +60% of GOR's total Resource was in Reserve at first gold, and this assumption is in line with our assumed mining inventory for the MGP, based on Hemi increasing to 10Moz and an overall MGP Resource of ~12Moz (Appendix 1). Valuation and recommendation.Our A$1.75/sh (previously A$1.60/sh) price target is based on an NPV10% for the MGP, net of corporate adjustments, and diluted for future equity requirements to fund ongoing exploration through FY22-24. SPECULATIVE BUY recommendation maintained.