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With gold prices soaring to record highs this month, investors are increasingly seeking opportunities within the ASX 200 for exposure to the precious metal. Among the standout contenders is Regis Resources Ltd (ASX: RRL), touted by analysts at Bell Potter as potentially undervalued and offering significant upside potential.
Bell Potter's bullish stance on Regis Resources stems from the company's recent release of the definitive feasibility study (DFS) for its 100%-owned McPhillamys Gold Project in New South Wales. The brokerage firm has expressed strong confidence in the project's strategic significance and long-term viability in the current gold market environment.
According to Bell Potter's analysis, the McPhillamys project demonstrates robust metrics that meet or exceed expectations. Key highlights include favorable project economics, with pre-production capital expenditures (CAPEX) coming in at the lower end of forecasts and all-in sustaining costs (AISC) significantly below industry averages recently measured at approximately AU$2,100 per ounce.
In response to the DFS update, Bell Potter has reaffirmed its buy rating on Regis Resources with a revised price target of AU$2.70, down slightly from AU$2.80 previously. Despite this adjustment, the new target implies a substantial 41% potential upside from Regis's current share price of AU$1.91 over the next 12 months.
To illustrate the potential impact of this recommendation, Bell Potter highlighted that a $10,000 investment in Regis Resources today could potentially grow to $14,100 by this time next year, assuming the target price is achieved.
Looking ahead, Bell Potter anticipates that Regis Resources will continue to benefit from ongoing resource growth initiatives and the delineation of high-grade satellite ore sources. These strategies could further enhance project economics and mitigate initial CAPEX concerns, solidifying the company's position as a compelling investment opportunity in the gold mining sector.
To summarise, Bell Potter's endorsement underscores Regis Resources as a standout performer in the ASX 200, poised to capitalize on the favorable market conditions for gold. Investors keen on leveraging the rising gold price trend may find Regis Resources an attractive addition to their portfolios, driven by its promising project developments and potential for significant share price appreciation in the coming year.
