Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


Analyst Launches Coverage on Gold E&D Co.
Research Report

View Important Disclosures for this Article
Share on Stocktwits


The Buy-rated Canadian firm is advancing its flagship project in Guyana, aiming to reach the construction decision point next year, noted a Leede Jones Gable report.

Reunion Gold Corp. (RGD:TSX.V) caught the interest of Leede Jones Gable, that initiated it with a Top Pick designation and a Buy rating, analyst Ron Stewart reported in a February 22 research note.

"[The company's] Oko West gold project in Guyana has emerged as one of the best new gold discoveries of the 21st century," Stewart wrote. "Our analysis suggests Oko West has the potential to become a Tier One gold mine."

113% Potential Return

Leede Jones Gable assigned Reunion a CA$0.85 per share target price, which compares to the current price of about CA$0.40 per share, noted Stewart. The difference between these prices implies a 113% potential gain for investors.  

The analyst pointed out that Reunion's current valuation is compelling, and the stock is trading at a 28% discount to its peers on an enterprise value per ounce basis.

The Ontario, Canada-based gold mining company has 1,229,000 outstanding shares and a market cap of CA$491.6 million (CA$491.6M).

Advancing Flagship Asset

Stewart presented the key points about Reunion, including a description of each of its three properties.

The company's flagship project is Oko West, near Georgetown, the capital city of Guyana, a mining-friendly jurisdiction, the analyst wrote. Encompassing the Kairuni deposit, Oko West has a current total resource of 4,200,000 ounces (4.2 Moz) of gold. Reunion aims to advance Oko West to readiness for a construction decision in late 2025 and produce first gold there in 2027.

According to Leede Jones Gable calculations, Oko West could produce more than 300,000 ounces per annum at an average all-in sustaining cost of less than US$850 per ounce, Stewart wrote. Kairuni's geometry and grade continuity are conducive to open-pit mining.

To date, Reunion has defined Kairuni over 1.5 kilometers (1.5 km) in strike length and up to 1 km in depth. The deposit offers further upside potential, given it remains open at depth. Also, minimal exploration has been done in the area of the 3.5 km-long gold-bearing shear zone extension.

Also noteworthy is the metallurgy, Stewart wrote. Gold recoveries at Oko West of 92−95% are expected to be achievable on a commercial scale.

Two More Properties

Reunion's other two assets, Dorlin and Boulanger, in French Guiana, are on care and maintenance, Stewart relayed.

With Dorlin, Reunion has an earn-in option for a 75% interest in the project. It must deliver a feasibility study on the project within five years of the date the permit was renewed. The application, submitted in 2015, is still pending.

So far, Reunion and other operators drilled 239 holes over 31,200 meters (31,200m) at Dorlin, primarily in the Nivré target.

"Considerable exploration potential remains on the Dorlin project," Stewart wrote. "The Nivré deposit itself is open in all directions, and as many as 11 additional geochemical targets remain virtually unexplored."

At Boulanger, Reunion has drilled two prospective areas, Cirque Filon and Saint-Michel. Regarding Cirque Filon, results for 72 holes targeting the Doyle and Capra targets returned an average grade of 3.42 grams per ton (3.42 g/t) gold.

Toward the northern boundary of the property, Reunion, in September 2019, completed an 18-hole, 900m reverse circulation drill program followed by a 7-hole, 1,000m diamond drill program. Results showed 12 significant mineralized intervals averaging 5.7m in length and 1.85 g/t gold in grade.

Significant Catalysts Nearing

The next possible stock-moving event, expected around the end of this month, February, is the release of an updated resource estimate for Oko West. It will incorporate the results of about 50,000m of infill and expansion drilling done since June 2023, the date of the previous resource estimate.

"Given the success of the recent drilling, we believe the company could be looking at a total mineral inventory of close to 6 Moz with as much as 60% in the Indicated category," Stewart commented.

On July 8 of this year, about 63 million share purchase warrants will expire, and Leede Jones Gable expects most will be exercised. Were all to be exercised, they would yield an estimated CA$25M, Stewart noted.

Also, Reunion will keep drilling at Oko West both to expand the resource and to explore the rest of the property.

All Cashed Up

Reunion is well-funded to continue advancing Oko West, Stewart wrote. As of Q3/23, it had $82M of cash and short-term investments, as well as CA$77.2M of working capital.

Leadership With mining savvy

Stewart describes Reunion Gold's team as having tremendous experience, boasting a solid track record, and having "chalked up more mineral discoveries in the Guiana Shield of South America than all their competitors combined.

"Together this team is credited with six gold deposits totaling approximately 30 Moz, including Omai (4 Moz), Rosebel (greater than 13 Moz), Montagne d'Or (5 Moz)," he added.

To name a few team members, David Fennell has been Reunion's executive chairman since 2003 but has 35 years in the mining industry. His numerous successes include involvement in the discovery and development of the Omai gold mine in Guyana and the Rosebel mine in Suriname as Golden Star's CEO.

President and Chief Executive Officer (CEO) Rick Howes is a mining engineer with 40 years of experience behind him. Most recently, he was President and CEO of Dundee Precious Metals.

Chief Financial Officer Alain Krushnisky, in his 25 years in the mining sector, spent a decade at Cambior and has held various positions, including vice president and controller.

Want to be the first to know about interesting Gold investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. Subscribe

Important Disclosures:

  1. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  2.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

For additional disclosures, please click here.

Disclosures for Leede Jone Gable, Reunion Gold Corp., February 22, 2024

Important Information and Legal Disclaimers Leede Jones Gable Inc. (LJG) is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF). This document is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular investing strategy. Data from various sources were used in the preparation of these documents; the information is believed but in no way warranted to be reliable, accurate and appropriate. All information is as of the date of publication and is subject to change without notice. Any opinions or recommendations expressed herein do not necessarily reflect those of LJG. LJG cannot accept any trading instructions via e-mail as the timely receipt of e-mail messages, or their integrity over the Internet, cannot be guaranteed. Dividend yields change as stock prices change, and companies may change or cancel dividend payments in the future. All securities involve varying amounts of risk, and their values will fluctuate, and the fluctuation of foreign currency exchange rates will also impact your investment returns if measured in Canadian Dollars. Past performance does not guarantee future returns, investments may increase or decrease in value and you may lose money. LJG employees may buy and sell shares of the companies that are recommended for their own accounts and for the accounts of other clients. LJG employees may buy and sell shares of the companies that are recommended for their own accounts and for the accounts of other clients. Disclosure codes are used in accordance with Policy 3400 of IIROC.

Description of Disclosure Codes

  1. LJG and its affiliates collectively beneficially own 1% or more of any class of equity securities of the company as of the end of the preceding month or the month prior to the preceding month if the report was issued prior to the 10th.
  2. The analyst or any associate of the analyst responsible for the report or public comment hold shares or is short any of the company's securities directly or through derivatives.
  3. LJG or a director or officer of LJG or any analyst provided services to the company for remuneration other than normal investment advisory or trade execution services within the preceding 12 months.
  4. LJG provided investment banking services for the company during the 12 months preceding the publication of the research report.
  5. LJG expects to receive or intends to seek compensation for investment banking services in the next three months.
  6. The analyst preparing the report received compensation based upon LJG investment banking revenues for this issuer within the preceding 12 months.
  7. The director, officer, employee, or research analyst is an officer, director or employee of the company, or serves in an advisory capacity to the company.
  8. LJG acts as a market maker of the company.
  9. The analyst has conducted a site visit and has viewed a major facility or operation of the issuer.
  10. The company has paid for all, or a material portion, of the travel costs associated with the site visit by the analyst.

Dissemination All final research reports are disseminated to existing and potential institutional clients of Leede Jones Gable Inc. (LJG) in electronic form to intended recipients thorough e-mail and third-party aggregators. Research reports are posted to the LJG website and are accessible to customers who are entitled the firm’s research. Reproduction of this report in whole or in part without permission is prohibited.

Research Analyst Certification The Research Analyst(s) who prepare this report certify that their respective report accurately reflects his/her personal opinion and that no part of his/her compensation was, is, or will be directly or indirectly related to the specific recommendations or views as to the securities or companies. Leede Jones Gable Inc. (LJG) compensates its research analysts from a variety of sources and research analysts may or may not receive compensation based upon LJG investment banking revenue.

Canadian Disclosures This research has been approved by Leede Jones Gable Inc. (LJG), which accepts sole responsibility for this research and its dissemination in Canada. LJG is registered and regulated by the Investment Industry Regulatory Organization of Canada (IIROC) and is a Member of the Canadian Investor Protection Fund (CIPF). Canadian clients wishing to effect transactions in any designated investment discussed should do so through a LJG Registered Representative.

U. S. Disclosures This research report was prepared by Leede Jones Gable Inc. (LJG), a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF). This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. LJG is not registered as a broker-dealer in the United States and is not be subject to U. S. rules regarding the preparation of research reports and the independence of research analysts. Any resulting transactions should be effected through a U. S. broker-dealer.

Want to read more about Gold investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe