Carnaby Resources (ASX:CNB) continues to be undervalued relative to its peers and given its production potential, Euroz Hartleys said in a Tuesday note, adding that the market may have missed a near-term production opportunity.

The company has commenced a roughly 3,000 meters reverse circulation drilling program at its Greater Duchess copper gold project in Queensland, targeting extensions of high-priority mineralization at the Trekelano deposit.

In addition, more assay results from a recently completed diamond drilling program are also pending, providing near-term news flow alongside the current drilling program, the equity research firm said.

Leveraging its binding tolling and offtake deals with Glencore provides a low capital pathway to first production for Carnaby, and the first three years of production on Euroz Hartleys' modeling should come from lower-risk open pit reserves in the Trekelano, Mt Hope and Lady Fanny operations, it said.

The equity research firm maintain a speculative buy recommendation on the stock with a price target of AU$0.96.