Petra Capital Report: The hits keep on coming

This report has been prepared by Petra Capital.

Recommendation: BUY

• Large tenement holdings in WA prospective for gold, rare earths, niobium

• Near term gold production supports a “self-funded strategy”

• Highly invested Board and management to drive exploration success

DRE is an active, well-funded (A$22m cash) West Australian explorer with a technically strong and incentivised Board and management team unlocking gold, critical, and base metals in some of the State’s most promising but overlooked ground. A “More Gold, Faster” strategy sees near-term production and cash flow via a JV with Black Cat Syndicate (ASX:BC8) at the Star of Mangaroon, with Metzke’s Find to follow a similar development path. Company-changing upside lies in exploration drilling targeting large gold systems at Mangaroon and Illaara, and from metallurgical testwork currently underway at Mangaroon Critical Metals. We initiate with a BUY and target price of A$0.05/sh with material scope for upside as DRE’s multi-metal potential is defined over the next 12-24 months.  

DRE – a lot to like

• Massive landholding in Tier-1 jurisdiction: All three projects (Mangaroon, Illaara, Kimberley) are located in Western Australia, with the 5,000km2 Mangaroon Project in particular one of the last large-scale, contiguous, underexplored tenement packages in WA.    

• Game changing potential: 7x camp-scale gold projects and numerous drill targets identified at Mangaroon Gold. Drilling to recommence following up on recent positive intersections. First ever systematic drilling program commenced at Illaara. Whilst targets remain early-stage, we believe there is strong potential for exploration success. Nb/TREO met. testwork from Gifford Creek underway; success here will attract strategic interest.

• In-focus commodity exposure: DRE offers high-quality exposure to both the current gold bull market and the growing demand for critical minerals (rare earths, niobium). Other projects offer Ni-Cu-PGE opportunities.

• Near-term gold production: Turn-key agreement with BC8 to develop the high-grade 27koz @ 11.1g/t Au Star of Mangaroon open pit Resource. BC8 to fund development (up to A$10m) and mining, hauling, and processing costs, in exchange for a profit-share (50/50 up to A$80m); mining commencing from mid-2026.

• Strong cash position and future cash flow: A$21.8m in cash as of 31 Dec.’25 with cash flows from the BC8 JV (A$54m attributable to DRE, Petra est.) to provide DRE with a unique "self-funded explorer" pathway.

SOTP valuation of A$263m (A$0.05/sh)

• Our sum-of-the-parts (SOTP) valuation for DRE of A$263m is derived from an attributable NPV8 of A$50m for the Star of Managaroon JV with BC8, and from peer group market capitalisation/Resource valuations for DRE’s gold, rare earths, niobium, and copper Resources.

Key Dates Ahead

• April 2026 – Assays from aircore drilling at Illaara Project.

• Mid-2026 – Start of mining at Star of Mangaroon.

This is an extract of the original full report. Full report can be downloaded here.