ASX Gold Small Caps: Here are our 3 favourite in 2023

Nick Sundich Nick Sundich, July 5, 2023

There are plenty of ASX gold small caps, but which ones are the best?

We’ve selected our favourite 3, all of which are aspiring developers with promising deposits and near-term upside!

 

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Why you might consider investing in ASX gold small caps

Investing in ASX gold small caps can be a good choice for those seeking higher returns with potentially less risk.

Small cap stocks often carry greater growth potential than larger blue-chip stocks, and investing in the gold sector provides access to a historically stable asset class.

Gold has traditionally been seen as a safe-haven asset, meaning that it tends to hold its value when other assets may suffer during times of financial uncertainty or economic instability. In the last 12 months, spot gold prices have gained 6%.

 

Spot gold price, log scale (Source: TradingView)

 

Furthermore, small cap gold companies are typically less established and more agile than their larger counterparts, allowing them to capitalize on market fluctuations and opportunities faster and more efficiently.

 

Our top 3 ASX Gold Small Caps

 

Nova Minerals (ASX:NVA)

Nova Mineral is an ASX gold small cap whose flagship Estelle project in Alaska currently has a JORC 2012 gold resource of 9.9 million ounces. Nova has an 85% interest in Estelle.

An initial February 2022 Scoping Study just focused on one deposit at the project (Korbel) came back with an NPV of US$381m on a 5% discount rate after pre-production capex of US$424m.

All-In Sustaining Costs (AISC) were estimated at US$1,120 an ounce. A Stage 2 Scoping Study, which looked at Korbel plus RPM (a second deposit at the project), was published in May 2023.

Phase 2 increased the Estelle NPV to US$654m but lowered the pre-production capex to US$385m.

This time the AISC was $1,149 an ounce. Payback time was a mere 11 months, and the IRR was 53%. Importantly, the Phase 2 study did not include the Cathedral deposit at RPM, with its 2 million ounces.

The company hopes to further build out the Estelle resource before conducting feasibilities studies on a future mining operation.

Nova also owns 38% of Snow Lake Resources (NDQ: LITM), which is developing the Snow Lake Lithium Project in northern Manitoba. 

 

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Medallion (ASX:MM8)

Medallion owns the Ravensthorpe Gold Project where it has a 1.6Moz deposit at 2.6g/t.

It has all necessary licenses, approvals and infrastructure in place.

Ravensthorpe offers promise of a 100kozpa project for at least 8 years with further upside as it completes a PFS (due in the September quarter) and completes further exploration work. It is planning on undertaking 40,000m of drilling over the next couple of years.

It is valued at only A$12/oz which is well behind several of its peers with lower-grade and smaller resources.

Medallion has one of the best boards of all ASX gold small caps including Non-Executive Chair John Fitzgerald, who also serves on the board of Northern Star (ASX:NST), as well as Anthony James who is the boss of Galena Mining.

 

Brightstar (ASX:BTR)

Brightstar, which has multiple projects in the WA Goldfields (including Laverton, Cork Tree Well and Menzies), has an impressive JORC Resource for an ASX gold small cap, at just 20.5Mt @ 1.5g/t for 965koz!

It has infrastructure all ready to go, both processing and non-processing alike (an airstrip and an accommodation camp).

The key catalyst facing it is a JORC Mineral Resource update which it expects to complete in Q3 2023.

It has further upside facing it from further exploration work and as mining begins. Like Medallion, it trades at a discount to many of its peers with an Enterprise Value of $17/oz.

 

 

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