Minerals 260's (ASX:MI6) drilling results at the Bullabulling gold project in Western Australia are largely extensional to the resource and continue to be higher grade than the project's resource grade, Euroz Hartleys said in a Wednesday note.

This supports the potential for resource upgrades, which would transition into improvements in production and cost profile of the development.

It noted that the drilling program at the firm's project intercepted higher-than-resource grades across several intercepts. Lifting the grade above the 1.2 grams per tonne gold resource grade means for a five-million-tonnes-per-annum processing plant, production starts nearing 200,000 ounces per annum.

The investment firm maintained its speculative buy recommendation on Minerals 260 and placed its AU$0.51 per share price target under review.