Brightstar Hits More High-Grade Gold at Sandstone: Analysts See 227% Upside- Is BTR a Buy?

Brightstar Resources (ASX: BTR) continues to find more high-grade gold at its Sandstone Hub, with fresh drilling at Bull Oak and Havilah delivering strong results. Yet despite holding over 3 million ounces of gold resources and record gold prices above A$4,000 per ounce, the stock has fallen 19% over the past year. It has also underperformed the broader market by more than 20% over six months.

This creates an interesting puzzle for investors. East Coast Research recently lifted its 12-month price target to A$1.787, implying 227% upside from recent levels around A$0.46. When a stock trades this far below analyst targets during a gold bull market, it either signals a compelling buying opportunity or a warning that the market sees risks that analysts are missing. Here’s how to assess it.

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Brightstar Advances Sandstone Hub Towards Key Study

The company currently has four drill rigs working at Sandstone, using both RC (reverse circulation) and diamond drilling. For those unfamiliar with these terms, RC drilling is faster and cheaper for testing targets, while diamond drilling provides more detailed core samples. Together, they help build a clearer picture of what’s in the ground.

This work matters because Sandstone represents Brightstar’s long-term growth engine. Following the recent Aurumin acquisition, the Sandstone Hub now hosts 2.4 million ounces at 1.5 grams per tonne of gold. That’s a sizeable resource that could support years of production.

Management has outlined plans for over 130,000 metres of drilling throughout 2025. The Pre-Feasibility Study (PFS) currently underway will determine whether this resource can be mined profitably. In simple terms, the PFS answers the question, “Can we make money developing this project?” A positive outcome would be a major step forward and could trigger a share price re-rating.

The Bull Case- Why Analysts See Huge Upside

Several factors support the bullish analyst view. Brightstar holds a total resource base of over 3 million ounces across three project hubs: Laverton, Menzies, and Sandstone. The company aims to become a 200,000-ounce-per-annum producer within five years, which would place it among Australia’s mid-tier gold miners.

What sets Brightstar apart from typical exploration companies is its ownership of a fully permitted processing plant at Laverton. Building a new plant from scratch costs hundreds of millions of dollars and takes years. Owning one already gives Brightstar a significant head start and reduces the capital needed to reach production.

The company is also already generating cash from its Second Fortune and Fish underground mines. This operational revenue helps fund growth while development advances. Additionally, Brightstar recently secured A$18 million in financing from Ocean Partners without issuing new shares, preserving value for existing shareholders.

The Investor’s Takeaway- Opportunity or Value Trap?

The bull case looks attractive: analyst targets imply massive re-rating potential, gold prices are at record highs, and Brightstar offers clear near-term catalysts, including the PFS results and resource upgrades.

However, the bear case deserves attention. When a gold stock underperforms this badly during a strong gold market, it often signals market scepticism about execution. The 200,000-ounce production target requires successful development across multiple projects. Pre-production companies always carry funding and operational risk that can derail even promising stories.

We believe Brightstar offers leveraged exposure to gold with a clear catalyst path for investors comfortable with development-stage risk. The analyst upside is compelling, but the market’s hesitation warrants respect. Rather than taking a full position today, consider scaling in ahead of PFS results. This approach captures potential upside while acknowledging the uncertainty that has kept other investors on the sidelines.