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On Tuesday, Probe Gold Inc (PRB:CN) (OTC: PROBF) shares received a Buy rating from Desjardins with a price target set at Cdn$3.75. Currently trading at $1.10, the stock has shown significant volatility with a beta of 1.76. According to InvestingPro analysis, the company appears fairly valued based on its proprietary Fair Value model.
The coverage initiation by the firm highlighted the substantial mineral resources of the company, which includes approximately 10 million ounces (moz) of gold. The Novador project, Probe Gold's flagship asset, was particularly noted for its measured and indicated (M&I) resource of 5.9moz with a gold concentration of 1.5 grams per tonne (g/t) and an inferred resource of 1.5moz at 2.03g/t.
The analyst from Desjardins pointed out the project's potential for further discoveries. Recent drilling results at Novador have been among the most promising to date, suggesting that there is additional exploration upside. InvestingPro data reveals the company maintains a strong liquidity position with a current ratio of 3.5, providing financial flexibility for its exploration activities.
InvestingPro subscribers have access to 8 additional key insights about Probe Gold's financial health and market performance. Moreover, the company's strategic acquisitions of McKenzie Break and Croinor properties have been recognized as significant, as these regions have shown higher-grade gold deposits that could provide future high-grade mill feed to the main Novador project.
The analyst's commentary underscored the strategic importance of these acquisitions, which are seen as offering potential optionality for Probe Gold. The higher-grade results from the newly acquired properties could enhance the overall value and operational flexibility of the Novador project.
The company's overall financial health score is rated as "FAIR" by InvestingPro, with notably strong price momentum metrics despite trading at a relatively high Price/Book ratio of 12.83.
Desjardins' initiation of coverage and the establishment of a price target for Probe Gold Inc are based on the current and potential resources of the company's gold projects. The positive outlook reflects the firm's view on the company's asset quality and the exploration opportunities that lie ahead. The price target of Cdn$3.75 represents Desjardins' valuation of the company based on the provided information.
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