Capital markets firm Stonecap Securities raised its price target on Prodigy Gold Monday morning following an updated resource estimate at the miner's Magino project in Wawa, Ontario.

Magino now hosts 6.1 million ounces at 0.9 grams per tonne (g/t) gold, which is a 56 per cent increase relative to the company's prior resource estimate at the property of 3.9 million ounces at 1.0 g/t gold.

In addition, 95 per cent of the resource now resides in the measured and indicated category, versus 56 per cent previously.

The size and scope of the project is now likely to change, Stonecap analyst Brian Szeto noted.

"With the significant increase in the size of the resource, we believe the company will now revisit the production rate at the project where it currently stands at 20,000 tpd.

"It is likely that the company will begin looking at expanding capacity to 30,000 tpd, which would increase production to more than 350,000 oz/yr."

This is compared to forecast production of 250,000 ounces per year currently.

If the company does in fact decide to expand the size and scope of the project, Stonecap said it believes that additional time will be needed to complete the feasibility study for the project.

As such, it is likely that the study will not be completed until the second half of next year, Szeto added.

"The company has once again surpassed our expectations. We were only expecting an increase in the resource to 5.0-5.5Moz. The company made a habit of exceeding our explorations with each one of its key milestones in 2011 and is once again doing it here in 2012.

"With a war chest of over $50 million, we believe the company is financially sound and will continue to aggressively push forward the Magino project," the research note concluded.

After the resource update, Stonecap assumed that total mineable resources at Magino will be closer to 5.0 million ounces, versus its previous outlook of 3.5 million ounces.

The target price for Prodigy Gold was moved higer on the back of the new resource, to $1.50, up from $1.30. Shares are currently changing hands at 61 cents - up more than 3.3 per cent on the day.