JPMorgan starts Capricorn Metals with Overweight, sets $10.50 target

Published 02/05/2025, 06:26
JPMorgan starts Capricorn Metals with Overweight, sets $10.50 target

On Friday, JPMorgan initiated coverage on Capricorn Metals Ltd (CMM:AU), assigning an Overweight rating to the stock along with a price target of AUD10.50. Capricorn Metals, a gold producer based in Western Australia, has been recognized for its two key projects that offer long life and low-cost operations with potential for organic expansion.

The Karlawinda Gold Project (KGP) has been operational since 2021, and in the fiscal year 2024, it produced 113,000 ounces of gold. Current expansion studies aim to increase the plant’s throughput to 6.5 million tonnes per annum, with an anticipated production target of 150,000 ounces per annum. Additionally, the Mt Gibson Gold Project (MGGP) is progressing through the permitting process. The pre-feasibility study for MGGP suggests a mine life of 17 years, with an expected yield of 150,000 ounces per annum for the initial 15 years.

Capricorn Metals recently completed the payout of its hedging, positioning the company for coverage-leading, funded production growth. JPMorgan’s analysis points to an attractive discounted cash flow valuation support, with a price to net present value ratio of 0.70 times. The Overweight rating and price target of AUD10.50 reflect the firm’s positive outlook on Capricorn Metals’ growth prospects and financial position.

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