Märkte & Kurse

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Original-Research: Desert Gold Ventures Inc. - from GBC AG

17.03.2026 / 15:30 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
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The issuer is solely responsible for the content of this research. The
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Classification of GBC AG to Desert Gold Ventures Inc.

     Company Name:                Desert Gold Ventures Inc.
     ISIN:                        CA25039N4084

     Reason for the research:     Research Report (Anno)
     Recommendation:              Buy
     Target price:                0.93 CAD
     Target price on sight of:    31.12.2026
     Last rating change:
     Analyst:                     Matthias Greiffenberger, Cosmin Filker

From exploration optionality to a funded path to first gold

Desert Gold Ventures is in the middle of a strategic transition from a long
running exploration optionality story in western Mali into a staged
development and early operating readiness story anchored by its fully
permitted Barani East oxide gold project. The most important takeaway from
the recent flow of company communication is not simply that more planning is
being done, but that execution planning has begun to translate into real
mobilization, site governance, infrastructure sequencing, and an explicit
calendar toward an initial go live event. In parallel, management has taken
steps to ensure the balance sheet can support that near term execution push
while keeping broader exploration options alive across the much larger SMSZ
land package and the newer Tiegba exposure in Cote d'Ivoire. The equity
story is therefore shifting from a primarily geological debate into an
operational and project delivery debate, with the near-term share price
likely to be driven less by incremental drill intersections and more by the
cadence of tangible milestones such as water development, civil completion,
plant delivery, installation, commissioning and first gold production
performance.

Why the market should care now

Historically, Desert Gold has been valued primarily on optionality, scale,
and the probability of making a large discovery within a proven structural
corridor. Optionality stories tend to trade on sentiment cycles, drill
result momentum, and the cost of capital. They also tend to be punished when
capital markets tighten because the underlying asset cannot self fund.
Management is now attempting to change that dynamic by advancing Barani East
as an execution led, lower initial capital intensity project that can move
toward cash generating operations in phases. The central thesis is
straightforward: compress time to first meaningful operational validation by
starting with a simpler gravity only processing approach, validate mining
and metallurgy in the field, stockpile unrecovered or partially recovered
material for future processing, and then step up to higher recovery and
higher throughput configurations when technical confidence and financing
capacity improve. This staged approach is designed to reduce the upfront
engineering burden, lower the initial capital hurdle, and create shorter
cycle catalysts that are easier for the market to price.

The company is trying to create an internally consistent bridge between
exploration upside and development credibility. If Barani East progresses
from a permitted project into a constructed and operating asset, even at
modest throughput, the market can begin to treat Desert Gold as a company
with a pathway to recurring cash flows rather than solely a capital
consuming explorer. That changes the valuation framework, broadens the
investable audience, and can reduce the equity risk premium applied to
longer dated exploration optionality.

Barani East is moving from concept into execution

What matters most now is that Barani East appears to be moving from concept
into execution. The project has progressed from conceptual planning into a
series of field and engineering actions that indicate the company is
attempting to lock down execution risk early. This is evidenced by physical
mobilization, camp and site readiness work, on the ground technical
assessment, discovery of a material design conflict, and the creation of an
oversight framework that includes independent civil and conformity controls.

Physical presence and mobilization matter more than they appear. Opening and
operationalizing the project camp, initiating site cleaning and readiness,
and beginning community relations engagement signals the company is moving
from desktop planning into field governance. For early stage mining projects
in remote jurisdictions, the transition from head office planning to onsite
execution is where many hidden risks emerge. Logistics, site access
constraints, local administrative procedures, contractor availability, and
ground truth differences versus maps all begin to surface. The fact that the
company has disclosed a structured assessment visit and an explicit set of
mission objectives suggests a more disciplined approach than the typical
small cap pattern of mobilizing contractors without robust independent
verification.

The technical assessment element is particularly instructive. A key
disclosed finding was a conflict between the proposed infrastructure layout
and a strong natural drainage network. In practical terms, this type of
conflict is one of the most common sources of civil failure, schedule
slippage, and expensive rework, particularly in seasonal rainfall
environments. A poorly placed plant pad or access road can become a flood
channel. Foundations can be undermined. Road culverts and water diversion
structures can be undersized. The discovery of this issue prior to major
construction start is a positive signal. Even more important is the response
methodology: identification, proposal, submission to layout designers,
validation, then execution. This sequence indicates that management is not
treating the project as a simple drop in the plant and start running effort.
They are acknowledging that civil design and hydrology are critical path
items, and they are trying to resolve them before capital is committed
irreversibly to incorrect earthworks.

Another significant development is the articulation of a parallel workstream
approach. The company is sequencing site preparation and infrastructure
tasks to run ahead of plant delivery, which is a rational attempt to
compress the overall timeline and reduce idle time once major equipment
arrives. This includes site clearing and earthworks, road upgrades, ROM pad
preparation, plant foundations, water development, drainage controls,
utilities, security, lighting, offices, control rooms and camp
infrastructure. Each of these is typically straightforward in isolation but
becomes schedule critical when materials, labor, and approvals have to
align. Doing them early reduces the probability that the plant arrives and
sits on the ground while civil work catches up.

The use of independent civil oversight is also important. Selecting an
independent civil consultant team with a mission lead engineer and onsite
technical personnel, and mobilizing them once contracts are signed, suggests
an institutional commitment to quality control. For first time or early
producer builds, independent oversight can prevent a cascade of downstream
failures. Governance quality often explains why two projects with similar
scope have very different outcomes. A small modular plant can still fail if
foundations are wrong, drainage is mismanaged, or equipment is installed
without alignment and tolerance discipline. Independent oversight can also
improve contractor accountability, documentation quality, and the rigor of
handover procedures.

The financing now supports the build

The financing now supports this shift in emphasis. Desert Gold has raised
approximately C$7.21 million gross in recent equity financing. The company
stated that the proceeds are intended in part to commission the first phase
of its gravity plant at the fully permitted Barani East oxide gold project,
while also supporting exploration and general working capital.

The plan: start small, prove the mine, scale with confidence

The plan itself is best understood as a staged development roadmap.
Management's approach begins with a modular gravity processing plant
supported by enabling infrastructure, executed with a risk reduction
mindset, and tied to a defined commissioning target. The processing approach
starts with gravity only beneficiation of oxide material. Gravity circuits
exploit the density contrast between gold bearing particles and gangue to
concentrate free gold, often through centrifugal concentrators, shaking
tables, and associated classification and pumping systems. Gravity can be
attractive for oxide operations because it can be modular, relatively fast
to install, and does not require the same level of reagent handling and
tailings chemistry management as cyanidation circuits.

The key strategic point is that gravity only is not being presented as the
terminal configuration. The conceptual framework is an initial gravity phase
with moderate recovery, alongside a longer dated pathway to higher
recoveries through additional processing steps. The operational implication
is that the company intends to begin generating a gravity concentrate
product and recover a portion of contained ounces quickly, while maintaining
a pathway to capture additional ounces later from material that gravity does
not recover. This can be implemented through stockpiling of tails or
intermediate products, or by blending and reprocessing strategies once
additional circuits are installed. In that sense, the first phase is not
just a mine plan. It is also a field validation exercise intended to shorten
the route to a financeable, more optimized second phase.

Throughput and scalability sit at the center of this staged concept.
Management has outlined a small initial operation built for roughly US$2
million of initial capex and designed to start at around 200 tpd. It then
plans to expand in Q4 2026 with roughly another US$2 million of capex to
lift throughput toward 1,200 tpd. Investors should view this as a deliberate
decision to avoid overbuilding at the start. Expansion potential is only
valuable if the first phase proves the ore and the operating environment can
support scale. That means early commissioning metrics and operating
stability are disproportionately important. If the first phase demonstrates
repeatable throughput, recoveries near expectations, and manageable
operating costs, expansion becomes a credible and financeable next step. If
the first phase struggles with feed variability, mechanical reliability, or
recovery volatility, scaling up would simply scale up the problem. The logic
of the strategy is therefore to buy operational proof before spending
heavily on full optimization.

Infrastructure and water are part of the investment case

Site preparation and infrastructure planning deserve equal attention because
they determine whether the plant can operate sustainably. The plan includes
water sourcing via boreholes with meaningful targeted flow rates, suggesting
that process water and camp water availability is being treated as a core
constraint. Water is typically one of the most underestimated factors in
early oxide operations. Even if geology and metallurgy cooperate,
insufficient water supply can throttle throughput, degrade recovery,
increase downtime, and force capital spend into emergency solutions. The
decision to mobilize geophysical and drilling teams simultaneously is
consistent with a desire to accelerate the water workstream and reduce the
chance that water becomes the gating item during commissioning.

Civil works and drainage controls are another cornerstone. The earlier
discovery of a drainage network conflict implies that hydrology must be
engineered properly to avoid plant pad erosion, flooding of access roads,
and washouts that isolate the site. The plan therefore includes layout
adjustments, validation, and then execution. In a best practice framework,
this should also encompass appropriate road camber, culvert sizing,
diversion channels, retention or settling structures for stormwater, and
robust surface management around stockpiles and ROM pads. Management appears
to understand that for a small mine in a remote jurisdiction, the line
between a clean startup and a delayed startup often runs through earthworks,
drainage, and logistics rather than metallurgy alone.

Operational readiness also requires local stakeholder engagement.
Communication with local administration and community relations matters
because a fully permitted project still requires social license maintenance,
local hiring practices, vendor engagement, and proactive communication
around site activity, water use, and environmental controls. As the project
transitions from exploration style intermittent activity to continuous
operations, this governance layer becomes part of the execution framework.
That is relevant to valuation because a staged producer is worth more when
the market believes it can actually keep operating, not merely start
operating.

The timeline underpinning this strategy is also increasingly explicit. Our
base case assumes Barani East follows a straightforward critical path to a
mid June 2026 go live. Under that framework, plant fabrication and factory
acceptance are completed by late March 2026, enabling shipment at month end.
We then assume roughly seven weeks of maritime transport to Dakar, followed
by late May port handling, customs clearance and inland delivery to site. In
parallel, site preparatory works run through March to late May and are
substantially complete when equipment arrives, allowing immediate
installation. Finally, we assume a late May to mid June assembly and
commissioning window, culminating in initial startup in mid June 2026. The
importance of this schedule is less about precision than about sequencing.

Our valuation: a small mine that should fund itself

Our valuation framework reflects this change in the company's profile. Using
the operating framework from the PEA and the staging assumptions, the Barani
East small mine points to a business that can sustain itself once
commissioned. The model assumes 96 kt processed in 2026 during ramp-up, then
432 ktpa from 2027 onward, with recovered grade of 0.96 g/t and
metallurgical recovery of 87%. That translates into roughly 2,578 ounces
sold in the startup year, about 11,600 ounces per year through steady state,
and 6,847 ounces in the final partial year. At a gold price of US$2,850 per
ounce, revenue rises from about US$7.35 million in 2026 to roughly US$33.06
million annually in steady state.

The operating cost structure is equally straightforward in the model. Mining
cost is set at US$10.10 per tonne, processing at US$13.90 per tonne, and G&A
at US$5.80 per tonne, for a total cash operating cost of approximately
US$29.80 per tonne. On a per-ounce basis that equates to roughly US$1,110
per ounce cash cost. On this basis, EBITDA is about US$4.49 million in 2026
and around US$20.19 million per year from 2027 through 2035. After
depreciation and a 20% cash tax assumption, free cash flow is slightly
negative in the startup year because the model places both the initial capex
and the stage-2 capex into the upfront build period, but it turns strongly
positive thereafter at roughly US$16.29 million annually in steady state.
Cumulative free cash flow exceeds US$155.9 million over the modeled mine
life.

The crucial implication is that this is not being valued as a large, capital
intensive mine build requiring repeated trips to the equity market just to
get to operating scale. It is being valued as a modest starter operation
with low upfront capital, rapid conversion of revenue into operating margin,
and a realistic path to becoming self funding after commissioning. On the
assumptions above, the project generates an NPV discounted at 10% of
approximately US$89.6 million. Those numbers are high because the capital
burden is small relative to the potential cash generation. The project
therefore has significance beyond its absolute production scale. It gives
the company a mechanism to convert part of its mineral inventory into
internally generated funding capacity.

Valuation impact of the Barani East gravity plant

The Barani East gravity plant is the most important new element in our
valuation framework because it introduces a near-term, already financed
production component into what has historically been a predominantly
exploration and development story. In our sum-of-the-parts valuation, we
assign the gravity plant a value of US$89.6 million, making it the
second-largest contributor to group intrinsic value after the Mali Oxide
Project PEA valuation of US$124.0 million. On this basis, the gravity plant
accounts for approximately 36.6% of total group value of US$244.8 million.

This is a meaningful shift in the structure of the valuation. The broader
Mali Oxide Project, the Tiegba Project in Côte d'Ivoire, and the Mali
non-PEA resources continue to support the company's strategic asset value,
but the Barani East gravity plant adds a different category of value. It is
not being valued primarily as long-dated geological optionality. Instead, it
is being valued as an already financed, staged, and executable mine
development with a credible route to near-term cash flow generation. In our
view, that distinction is central to the investment case because public
markets typically place greater value on assets that can move from
permitting and planning into production on a visible timeline and with
modest capital intensity.

The gravity plant therefore enhances both the magnitude and the quality of
Desert Gold's valuation. Numerically, it adds US$89.6 million to total
intrinsic value. Strategically, it changes how the market can think about
the company. Rather than valuing Desert Gold solely on what it owns in the
ground, investors can increasingly begin to value it on what it may be able
to monetize in the near term through a staged small-mine build that is
already financed at the first phase. That matters because the company has
now moved beyond a hypothetical funding discussion and into an execution
phase where the key debate shifts toward delivery, ramp-up, and operating
performance.

This also improves the balance of the sum-of-the-parts. The Mali Oxide
Project remains the largest component at US$124.0 million, or approximately
50.7% of total intrinsic value. The Tiegba Project contributes US$9.5
million, or roughly 3.9%, while Mali non-PEA resources contribute US$21.7
million, or around 8.9%. Against that backdrop, the gravity plant stands out
not just for its size, but for its role as the company's clearest bridge
between asset value and operating value. In other words, it is the component
most directly linked to a potential rerating from explorer-developer to
emerging producer.

On a per-share basis, our total intrinsic value of US$244.8 million
translates into US$0.68 per share based on 360.3 million shares outstanding.
This is equivalent to CAD$0.93 per share and EUR 0.59 per share. Within that
total, the Barani East gravity plant contributes approximately US$0.25 per
share. That is a substantial portion of total equity value and reinforces
our view that successful execution at Barani East is likely to be one of the
most important determinants of share price performance over the next phase
of the company's development.

In our view, the significance of the gravity plant extends beyond its
standalone DCF contribution. Because the first phase is already financed,
the project provides Desert Gold with something the market has not
historically been willing to ascribe in full: a credible and funded path to
internally generated cash flow. That would not only support the valuation of
Barani East itself, but could also strengthen confidence in the monetization
potential of the wider SMSZ portfolio. For that reason, we view the gravity
plant as both a major valuation contributor in its own right and a catalyst
capable of improving the market's valuation of the rest of the asset base.



You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=e3241d040ad0599d87531a85089d3958

Contact for questions:
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Completion: 16.03.2026 (5:45 p.m. CET)
First distribution: 17.03.2026 (3:30 p.m. CET)

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2292182 17.03.2026 CET/CEST

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