Emerald Resources’ exploration results confirm its long-term future as a profitable gold producer

About Emerald Resources

Emerald Resources NL (Emerald, the Company, ASX: EMR) has its headquarters in Perth and has been listed on the ASX since July 1994. The Company is a developer and explorer of gold projects with the Company’s key project being the Okvau Gold Mine in Cambodia which has been in full production since September 2021. The Company’s other Cambodian project is the high-grade Memot Gold project. Emerald’s interest in Cambodia extends over a combined area of about 1239 square kilometres. Emerald also has a 78 percent controlling interest in Bullseye Mining Limited, an unlisted Australian public company with two Western Australian gold projects totalling more than 1200 square kilometres of highly prospective gold tenure including the North Laverton Gold Project in the Dingo Range Greenstone Belt.

Directors and management own 20 percent and institutional investors own 47 percent of Emerald Resources.

Emerald Resources’ recent exploration results bode well for the future

Emerald Resources’ FY24 first half operating performance was marked by outstanding exploration results in Cambodia at the Okvau Gold Project and for the North Laverton Gold Project in Western Australia. The two Projects underpin Emerald’s long-term future as a high-growth mid-tier gold producer and explorer with projects in two continents. The release of the Group’s growth strategy described in the December 2023 half-year results announcement on 29 February has seen the Emerald share price appreciate by six percent in a couple of days.

The high margin Okvau Gold mine life currently extends beyond eight years and with ongoing drilling the gold resources are likely to continue to be replenished on an ongoing basis. Emerald’s other operation in Cambodia, the 100 percent owned Memot Gold Project, is located 100 kilometres southwest of the Okvau Gold Mine. Promising early-stage resource estimates at this mine site provide sufficient confidence to ramp up drilling activities throughout 2024 to enable project development in 2025.

December 2023 half-year snapshot

Rising gold production and the continuing strong gold price throughout 2023 explain the 32 percent revenue growth and 80 percent profit increase for the December 2023 half-year, compared to the December 2022 half-year reporting period. Revenue increased to $176.7 million and profit after tax to $44.7 million. Supporting these numbers was production of 57,292 ounces of gold at an All-in Sustaining Cost of US$810 per ounce. Gold sales volume was 13 percent higher than the December 2022 half-year at 58,350 ounces and the average gold sale price achieved for the 2023 half-year was US$1,952 per ounce, up 13 percent from US$1,732 in the 2022 half-year.

Looking ahead

A meaningful future share price catalyst is achieving 100 percent ownership of Bullseye Mining because Emerald’s directors have stated as a wholly owned subsidiary, Bullseye Mining could potentially provide Emerald with the opportunity to pay fully franked dividends to Australian shareholders. Completing this transaction will also enable Emerald Resources to bring the North Laverton Project to fruition. Emerald Resources currently own 78 percent of Bullseye Mining and the Independent Expert’s report has concluded that the Emerald all scrip Offer is both fair and reasonable. The bid is unconditional and has the unanimous support of the Independent Board Committee of the Bullseye Board. Assuming 100 percent acceptance of the Emerald Offer, Bullseye shareholders will own 20 percent of the enlarged Emerald Resources capital structure.

Emerald Resources owns a growing portfolio of productive gold mining assets and retains a strong balance sheet with cash reserves available to take advantage of identified growth opportunities, without shareholder dilution.

In the meantime, with market guidance for gold production at between 100,000 and 120,000 ounces for the full year to June 2024 at an AISC of between US$780 and US$850 per ounce, both the short-term and medium-term outlook for Emerald Resources appears overwhelmingly positive.