It’s much easier for a buzz stock like Spartan Resources (ASX:SPR) , but amid the noise this week in Kalgoorlie, the company is taking no chances.
The company has already become known for its light-hearted promotion, after featuring a life-sized cardboard cut-out of a Spartan – complete with a head hole for photo opportunities – at the RIU Explorers Conference in Fremantle earlier this year.
Taking it one step further this week, Spartans (or people dressed up as Spartans) on branded Spartan rickshaws will be riding around Kalgoorlie providing alternative transport to delegates to get to evening functions.
Aside from the clever stunt, which is akin to New Century Resources (ASX:NCZ) sponsoring the local kebab shop a few years back, Spartan will also be holding a ‘Hard Core Breakfast’ at the Kalgoorlie Hotel tomorrow, where guests can look at drill core from the high-grade Never Never gold discovery over bacon and eggs.
Even without the extra help, Spartan is set to be a main talking point in Kalgoorlie this week.
From a share price of just A10c in March 2023 to A$1.21 on Friday, not far off the all-time high of A$1.33 reached in July, Spartan’s recent success is what many juniors at the conference would like to emulate.
Two weeks ago, Spartan upgraded the high-grade resource at its Dalgaranga project in Western Australia to 2.48 million ounces grading 4.79 grams per tonne gold across several gin-themed gold deposits.
The update comprises 1.48Moz at 8.07g/t at the Never Never deposit, 438,100oz at 7.66g/t at the newer Pepper discovery and 558,900oz combined across the Four Pillars, West Winds, Sly Fox and Plymouth deposits.
The resources sit within 2km of Dalgaranga’s 2.5 million tonne per annum plant, which has been on care and maintenance since the end of 2022.
Aside from the high-grade ounces, which are still expected to increase, Spartan is also a hot topic due to recent corporate interest.
In late June/early July, ASX 200 gold producer Ramelius Resources (ASX:RMS) paid around A$180 million for a 17.9% stake in Spartan.
Dalgaranga is just 65km from Ramelius’ flagship Mt Magnet operation.
Ramelius managing director Mark Zeptner said last week that the company’s technical team had looked at publicly available information and concluded the investment was “a justifiable allocation of capital”.
“We were pleased to see that the recent mineral resource update validated our team’s view and presented no surprises from our perspective on the size and grade of the resource, so as a shareholder, we’re pleased with our on-paper returns, but we recognise there’s still a way to go to realise full value,” he said.
“While we’d like to have Never Never in our portfolio, we view it as a nice to have, not a need to have.”
Ramelius and Spartan will present back-to-back at Diggers on Wednesday morning.
Despite Spartan’s strong run, including a near-30% jump in July, analysts continue to be optimistic on the company’s future growth prospects.
Following the resource update, Canaccord Genuity analyst Tim McCormack increased his price target for Spartan by A30c to A$1.50.
His base case assumption is for a A$180 million, 1.2Mtpa underground mine, based on ore from Never Never and Pepper, to produce around 174,000ozpa at all-in sustaining costs at A$1514 an ounce from the September 2026 quarter.
Last month, Spartan awarded an A$18.3 million contract to Barminco for a 2350m exploration drill drive, which will allow for infill and extensional drilling from underground, as well as support future production.
In the meantime, surface drilling recently restarted.
“We expect Spartan to have 3-4 rigs on site for most of FY25, which should see regular news flow and systematic resource and reserve growth,” McCormack said.
