Strickland Metals [ASX:STK] Update
Metals & Mining
Strickland Achieves Major Gold Resource Expansion
We update STK with a revised Target Share Price $0.416, this represents a total upside potential of 521%, reflecting significant increase from the current share price of $0.067 and an 48% increase from our Target Share Price from our initiation report from December this year. The company's continued exploration success at Rogozna has resulted in a substantial resource expansion, reinforcing its position as a leading gold explorer. The recent 1.28Moz increase in total resources marks one of the most notable organic exploration-driven upgrades in the sector. This growth highlights STK’s efficient exploration strategy.
Rogozna Resource Increases By 23% To 6.69Moz AuEq JORC 2012
Strickland’s premier Rogozna Gold & Base Metals Project, located in southern Serbia within the renowned Tethyan Metallogenic Belt, continues to impress. The project, recognised for its extensive magmatic hydrothermal systems, recently reported an Inferred Mineral Resource Estimate (MRE) of 6.69Moz AuEq JORC 2012 complaint. In addition, a strong exploration pipeline is in place, with 50,000 meters of drilling scheduled for early March 2025.
Balance Sheet Strength Fuels Aggressive Exploration Targets
Following the divestment of the Millrose Gold project, Strickland Metals continues to demonstrate strong financial resilience. At the close of the December Quarter, the company reported a cash balance of $13.68 million. Additionally, its holdings in Northern Star Resources now stand at 1,301,535 fully paid shares, valued at approximately $22.90 million with the stock trading at $17.60 as of end of February 2025—bringing total liquid funds to around $36.6 million. During the quarter, the company further enhanced its liquidity by selling 198,465 Northern Star shares, generating $3.46 million in proceeds. Meanwhile, exploration and evaluation expenditure reached $5.85 million, predominantly supporting activities at the Rogozna Project in Serbia and the Yandal Project in Western Australia. This robust cash position underpins management’s aggressive exploration strategy, which targets up to 80,000 meters of combined drilling across its two key projects by late 2025. With four diamond rigs already operating at the Rogozna site, the strength of the balance sheet provides confidence that the exploration programme can proceed without any material equity dilution, reinforcing shareholder reassurance about the potential of project development.
Huge Exploration Upside
We update our valuation for STK to $0.379 per share in the base case and $0.453 in the bull case with a Price/NAV of 0.16x. Although STK’s Rogozna Project is still in the exploration phase, the company’s market capitalisation of $147.90 million does not fully capture its strong balance sheet, high-grade gold resource, and exploration upside potential. The bullish outlook for gold, driven by central bank demand, inflation hedging, and geopolitical uncertainty, provides a favourable macroeconomic backdrop for STK. With $36.6 million in cash and Northern Star shares, STK is fully funded to execute its aggressive 50,000m drilling campaign in 2025, targeting further resource growth beyond its 6.69Moz AuEq mineral resource. The company’s disciplined approach to exploration and potential resource expansion could unlock significant shareholder value. Risks include commodity price fluctuations, exploration results, and operational challenges, but STK’s strong financial position and growing gold inventory position it well for longterm upside.