Eshuys willing to be patient with DGO's investments

13th December 2019
Resources Rising Stars

Ed Eshuys has outlined what his company DGO Gold, primarily a resources investor, looks for in a company (reports MiningNews).

The company is focused on gold in Western Australia.

It screened 100 companies across three main criteria: low cost of discovery, potential for more than 5 million ounces of gold, and optionality to the upside.

DGO shortlisted 15 companies and so far has invested in two: De Grey Mining and NTM Gold.

Eshuys hopes the pair will be the next Bellevue Gold, Gold Road Resources, Dacian Gold or Capricorn Metals, which created a combined $1.2 billion of value for discovery costs of less than $20 an ounce.

"We're looking for discoveries with big margins," he told the Resources Rising Stars Summer Series last week.

Eshuys said De Grey had discovered 1.7Moz of gold at an average cost of $15/oz in the Mallina gold province in the Pilbara.

"The 25Moz Yandal belt is an analogue for the potential of Mallina," Eshuys said.

"The potential for finding a big one is why DGO has invested in De Grey."

DGO has 10.7% of De Grey and two board seats, while DGO has 35km of prospective shear in the region to the southwest of De Grey's 200km.

It contributed another $500,000 last week to maintain its position.

DGO has also invested in NTM, which has 500,000oz in resources near Leonora, found at a discovery cost of $12/oz.

The company exercised its anti-dilution right last month to maintain its 10.9% stake.

The exercise of 120 million could see DGO reach 19.9% of NTM.

Eshuys said less than 20% of the 40km-long Mertondale shear zone had been explored.

He said the scale potential was evident in NTM's exploration target of 840,000oz to 1.7Moz at 1.8-2.5 grams per tonne gold.

DGO is willing to be patient with its investments.

"Both have 2-3 years in front of them to build resources," Eshuys said.

DGO is also exploring for gold and copper-gold in WA and South Australia in its own right.

The company had $4.1 million in cash at the end of September.

DGO last traded at 87.5c, valuing the company at $30.8 million.

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