The stock jumped more than 11% on Monday after the company reported a major exploration breakthrough which points to an 800m-long core of very high-grade copper mineralisation.

The standout intersection was 43.6m at 7.6% copper equivalent, or 5.7% copper and 2.1 grams per tonne gold, including an upper volcanogenic massive sulphide zone grading 14.9m at 16% CuEq, or 11.5% copper and 5g/t gold.

It followed a hit of 49m at 6.1% CuEq, or 4.9% copper and 1.3g/t gold, including 14.3m at 13.7% CuEq, or 10.6% copper and 3.2% gold, reported earlier this month.

The majority of the high-grade core sits outside the current measured and indicated resource of 24.4 million tonnes at 1.9% CuEq for 460,000t of contained CuEq and inferred resource of 34.5Mt at 2% CuEq for 690,000t of CuEq.

FireFly has eight diamond rigs operating on site as part of a 130,000m drilling program focused on growing the resource, extending known mineralisation and making new regional discoveries.

Resource update coming

The latest results will feed into an updated resource estimate, the first since October 2024.

Canaccord Genuity expects this week’s results to significantly boost the inventory and subsequent economic studies.

“Based on the geometry of the orebody and latest results, an expectation for tonnage to ultimately grow to 80-100Mt at a grade in line or better than the current resource is not unreasonable, in our view, especially with the emergence of this higher-grade core,” analyst Tim McCormack said.

Similarly, RBC Capital Markets analyst Paul Wiggers de Vries is expecting the results to improve confidence in the resource.

He is expecting a 5-10Mt, or 10-20% increase, in the inferred resource, and a 41-70% jump in measured and indicated resources.

“Importantly, the VMS zone appears to be converging at depth which supports our previously forecast bulk mining expectations of 3.2Mtpa,” he said.

“Given the quality and grade of the intercepts announced, we expect FireFly to continue to perform positively.”

Near-term production

Green Bay is a brownfields site, having been in production as recently as early 2023.

FireFly has a head start on future production as the 2023 acquisition included infrastructure with a replacement value of A$250 million.

“We envisage at a 3Mtpa mining and milling rate, the operation should be able to produce circa 46,000tpa of copper and 22,000ozpa of gold at a C1 cost of A$2.94/lb,” McCormack said.

“We have assumed a capital requirement for a plant and underground infrastructure of A$400 million with first production in the September quarter 2028.”

RBC sees FireFly prioritising the high-grade VMS mineralisation at a run-rate of up to 1Mtpa to maximise payback.

Wiggers de Vries also assumes a second decline and a shaft to maintain a mining rate of more than 3Mtpa, taking total capital costs to A$1.1 billion.

“We expect first production in FY28 and that the mine will operate for 16 years,” he said.

“We do not include any regional production at this stage. This would be an upside beyond our current expectations.”

Analysts bullish

“We maintain our outperform, speculative risk rating, as we believe the company offers exposure to a relatively low risk, partially permitted copper/gold project with significant underground development, M&A desirability and asymmetric upside potential during a time of emerging global copper shortages,” Wiggers de Vries said.

“Our NAV valuation is A$1.65/share, which is fully diluted for a future equity raise of A$300 million at long-term copper prices of US$4.00/lb. Running spot pricing scenario (copper US$4.90/lb, gold US$4070/oz), our NAV valuation is A$3.04/sh.”

FireFly is also a key pick of Macquarie, which has an outperform rating and A$1.70 price target.

Macquarie last week lifted its copper price forecasts by 9% to US$4.71/lb in 2026 and US$4.65/lb in 2027.

Analysts noted that FireFly was approaching a “catalyst-rich period” among the copper developers under its coverage.

FireFly also owns 70% of the Pickle Crow gold project in Ontario, which has a high-grade resource of 2.8Moz at 7.2g/t gold.

Macquarie believes FireFly will announce the results of a strategic review into Pickle Crow before the end of the year.

“It is a good time to be selling a non-core gold asset in this price environment, and our base case forecasts are for sale proceeds of US$98 million,” it said.

Canaccord and Argonaut each have speculative buy ratings on FireFly, with price targets of A$2.15 and A$2.10, respectively.