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OMG: Increasing Target Price Based on Inclusion of Gilt Creek

What you need to know:
• Omai announced another batch of assay results, reporting six holes within its 13,716m 26-hole 2024 diamond drill program.
• The two holes reported highlight intercepts of 4.48 g/t Au over 57.0m including 21.13 g/t Au over 10.0m and 1.10 g/t Au over 63.2m.
• An updated mineral resource is planned to be released in Q2/25 with an updated PEA targeted to be announced in Q3/25.
• As mentioned, the Gilt Creek deposit will be included in the PEA, as such, we have updated our assumptions.
• We have increased our target price on Omai to $0.80/share.

Omai Gold Mines Corp. (OMG:TSXV, OMGGF:OTC) announced positive drill results on January 21st from its ongoing drill program at the Omai Gold Project in Guyana. The Company reported its best hole to date, intersecting 4.48 g/t Au over 57.0m including 21.13 g/t Au over 10.0m, and another strong hole of 1.10 g/t Au over 63.2m. These very wide gold zones were drilled within the ‘Dike Corridor’ which is one of five main subparallel gold zones that make up the Wenot deposit. Assays are pending for an additional four holes and drilling is expected to continue into late Q1/25 within a new 10,000m 2025 drilling program, which will be followed by an updated mineral resource estimate in Q2.

As we near the release of the updated mineral resource estimate and later, updated PEA which will include the Gilt Creek deposit, we have modelled our preliminary estimates for what this would look like in an economic study. In doing so, our estimated NPV has increased from US$777M to US$1,233M (at US$2,200/oz Au). We are maintaining our BUY rating and increasing our target price on OMG from $0.40/share to $0.80/share.

Assays were reported for six drill holes with four additional assays pending. Highlights from the release include:

• Hole 24ODD-092: 4.48 g/t Au over 57.0m including 21.13 g/t Au over 10.0m
• Hole 24ODD-094: 1.10 g/t Au over 63.2m including 1.63 g/t Au over 21.0m
• Hole 24ODD-091: 0.79 g/t Au over 48.0m, 5.76 g/t Au over 5.4m, and 2.50 g/t Au over 9.0m
• Hole 24ODD-090: 1.01 g/t Au over 28.5m

Updated PEA Estimates – New Target Derivation (Atrium Generated)
With the inclusion of our estimates for the Gilt Creek underground mine, we have attributed an additional ~75Koz of annual gold production, as well as boosting the Wenot open pit production by ~20Koz/yr. This grows the total annual gold production to 239Koz/yr, bringing our new NPV5% (assuming US$2,200/oz Au) to US$1,233M (up from US$777M). We have started using a US$2,200/oz gold price as gold continues to press higher. With the inclusion of some inflation and the higher-cost nature of underground mining, our cash cost and AISC increased modestly to US$1,119/oz and US$1,264/oz, respectively. Initial capex also increased to $567M though, this is considered a modest increase when compared to the significant increase in NPV as a result.