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Canaccord Genuity initiated coverage on ACG Metals Ltd (LSE:ACG) with a buy rating and a price target of GBP8.30, citing the company’s transition from gold to copper production.
ACG Metals fully owns the Gediktepe copper/gold mine in Turkey, which is currently operating primarily as a gold oxide operation but will shift to copper sulphide production next year. The US$146 million sulphide expansion project is fully permitted and funded, with site works already underway.
Plant construction for the expansion is scheduled to begin in the third quarter of 2025, according to Canaccord Genuity. The project has an estimated mine life of 10-11 years through 2034/2035, with average life-of-mine production estimated at 22,000 tonnes per annum copper equivalent.
The company forecasts first production from the sulphide operation in the second quarter of 2026. Canaccord Genuity notes that construction progress in the second half of 2025 will be crucial for a smooth transition from oxide production in the first quarter of 2026 to sulphide production in the following quarter.
Canaccord Genuity forecasts lower EBITDA year-over-year for 2026 and neutral free cash flow, warning that any delays could negatively impact finances. The firm conservatively projects minimal sulphide contribution in the second quarter of 2026, with a six-month ramp-up period to full production by the first quarter of 2027.
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