Ausgold's (ASX:AUC) Katanning gold project in Western Australia remains a highly attractive development, with strong margins, rapid payback, and the potential for scalable open-pit growth, Euroz Hartleys said in a Tuesday note.

The company recently reported broad and high‐grade gold intercepts across the Central and Southern zones from ongoing infill and extension drilling.

Near‐term news flow is anticipated to remain strong prior to the planned mineral resource estimate update in the third quarter of the year, with 12,000 meters of assays pending and the drill program expanded to 54,000 meters from 44,000 meters, the financial services firm said.

The project is anticipated to yield 143,000 ounces per year at an all-in sustaining cost (AISC) of AU$2,157 per ounce in the first four years, before averaging 120,000 ounces per year at an AISC of AU$2,247 per ounce over its 10‐year life‐of‐mine plan.

The AU$354 million pre-production capital is expected to be repaid in under 1.5 years, with the possibility of an even faster payback at current elevated gold prices.

Euroz Hartleys reaffirmed its speculative buy rating on Ausgold and lifted its price target to AU$2.70 from AU$2.45.

Ausgold shares fell past 1% in afternoon trade Wednesday.