Original-Research: Desert Gold Ventures Inc (von GBC AG): Buy

Classification of GBC AG to Desert Gold Ventures Inc

Company Name:	Desert Gold Ventures Inc
ISIN:	CA25039N4084
Reason for the research:	Research Comment
Recommendation:	Buy
Target price:	0.93 CAD
Target price on sight of:	31.12.2027
Last rating change:
Analyst:	Matthias Greiffenberger, Cosmin Filker

Plant on Site, First Gold in Sight

Desert Gold Ventures’ 16 September construction update confirms meaningful progress at Barani East and supports our positive view of the company’s transition from exploration to initial gold recovery. The 200 tonne-per-day gravity plant and 650 kVA generator have both reached the site in western Mali, removing a major delivery uncertainty identified in our May research comment. The revised schedule, however, is materially later than previously expected: commissioning is now planned through late October, followed by ramp-up and initial processing in November. We maintain our Buy recommendation and C$0.93 target price, while recognizing that the potential start of cash generation has moved back.

The generator reached Dakar in July and the processing plant in mid-August; both were cleared and transported to Barani. The principal access route from Bourdala has been rehabilitated, while civil works, plant erection and electrical and mechanical installation remain to be completed. Desert Gold attributes the delay to ocean freight, regional fuel and material shortages, contractor availability and the rainy season. In May, the company had targeted commissioning for mid-July. The new timetable therefore represents a delay of roughly three to four months, even though equipment delivery and improved access now make the remaining work more tangible.

The plant and generator are now physically at Barani, the main access route can accommodate them, and Desert Gold has a clear sequence for erection, commissioning and processing. These steps reduce uncertainty around procurement and transport. If the remaining works finish on schedule, investors can soon judge the operation on actual throughput and gold recovery rather than development plans alone.

Water availability has also advanced, but is not yet fully established for continuous operations. Following 15 geophysical survey lines and four boreholes, three holes returned reported rates of 24 m³, 9 m³ and 8 m³ per hour. The final hydrogeological report is pending, so these results should not yet be treated as proof of sustainable supply at the required quality and seasonal reliability. The company reports no project-specific security, safety or community incidents durin0g its 2026 reporting periods to date.

The distinction between an initial milestone and a producing mine remains important. Desert Gold targets initial gold recovery in Q4 2026, conditional on completing construction, commissioning and ramp-up. It has not declared commercial production or established mineral reserves at Barani through a feasibility study. The current 200 tpd gravity plant is also separate from the approximately 1,200 tpd gravity and carbon-in-leach scenario assessed in the November 2025 PEA; the larger development would require further technical work, approvals and financing. Accordingly, the first operating data on feed grade, throughput, recovery, uptime and costs will be more informative for valuation than the equipment delivery alone.

The remaining execution phase also calls for sufficient fuel, consumables, personnel and working capital during commissioning and ramp-up. The public update does not quantify the construction spending still required, the amount of prepared feed or the liquidity buffer available at start-up. These items matter for the pace of ramp-up and the potential need for additional capital, so we will assess them when the company provides verifiable public figures. The September release itself identifies capital and operating costs, logistics, fuel supply and the availability of mineralized material among the project risks.

The publicly disclosed warrant structure adds funding optionality. Desert Gold raised C$7.18m gross in its February LIFE offering for the initial Barani plant, exploration and general working capital. At 31 December 2025, it had 15.83m warrants outstanding at C$0.08, representing about C$1.27m in potential gross proceeds if all were exercised. The February offering added 3.32m finder warrants at C$0.08 and approximately 44.89m unit warrants at C$0.12. Those February-issued warrants alone represent approximately C$5.65m in possible gross inflows and 48.21m new shares if all are exercised. This is a meaningful potential source of working capital that could reduce the need for a separate placement during ramp-up. Exercise remains at holders’ discretion and entails dilution. We do not count potential proceeds as cash or assume when exercises might occur; updated share capital will be needed before revisiting the per-share valuation.

Our May valuation attributed US$89.6m to the Barani East gravity plant, US$124.0m to the Mali oxide PEA project, US$21.7m to other Mali resources and US$9.5m to Tiegba in Côte d’Ivoire, yielding the existing C$0.93 per-share target. The latest release improves confidence that the initial plant can be assembled and tested, while the longer schedule and outstanding operating inputs warrant monitoring before changing those assumptions. The wider SMSZ exploration programme remains a potential source of additional near-mine feed and resource growth; the April announcement of a 4,250 metre RC campaign has yet to be followed by published results in the company’s current news list. On balance, the recent news confirms our positive outlook and we reiterate our Buy rating and unchanged target price of C$0.93 per share. We will revisit the assumptions as construction, water-supply and operating data become public.

You can download the research here: 20261008_Desert_Gold_Ventures_Comment
Contact for questions:
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
++++++++++++++++
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: https://www.gbc-ag.de/de/Offenlegung
Hinweis zu Issuer-Sponsored Research: Vorliegende Researchstudie ist Issuer-Sponsored Research und wurde in Übereinstimmung mit dem EU-Verhaltenskodex (EU Code of Conduct) für Issuer-Sponsored Research erstellt.
+++++++++++++++
Completion: 08.10.2026 (1:45 p.m. CEST)
First distribution: 08.10.2026 (2:30 p.m. CEST)