Turaco Gold (ASX:TCG) strengthened its investment case after the pre-feasibility study (PFS) for its Afema project outlined a scalable, high-margin gold development with rapid payback, strong reserve growth potential and an attractive valuation, Euroz Hartleys said in a June 26 note.

The research firm said the PFS projects annual gold production of more than 200,000 ounces over a 10-year mine life, with higher early-stage production expected to accelerate capital recovery, while initial capital expenditure of $442 million came in below its $450 million forecast, improving capital efficiency and reducing execution risk.

Euroz Hartleys noted the maiden ore reserve of 1.9 million ounces provides a solid foundation for the project, while the larger 4.7 million-ounce mineral resource, along with the Herman and Begnopan deposits, offers potential to extend mine life and increase production.

The firm highlighted the project's location in southern Ivory Coast, near Abidjan and existing infrastructure, provides logistical advantages, with further mine design and processing optimization expected to improve economics ahead of the definitive feasibility study.

The firm said that the company remains undervalued versus its Australian Securities Exchange-listed peers, trading at about AU$100 per resource ounce against a peer average of AU$190. It added that the project's scale, manageable capital requirements, and strong economics make it an attractive takeover target.

Euroz Hartleys maintained a speculative buy recommendation on Turaco Gold with a price target of AU$1.85.

The company's shares fell past 1% in recent Monday trade.