29Metals’ September quarter featured weak production at Golden Grove offsetting a better result at Capricorn Copper. Managagement has nonetheless retained 2021 production guidance but the broker believes costs will be higher than guidance suggests.
However better grades at Golden Grove should lead to significant improvement in earnings and cash flow in the December quarter and in to 2022, the broker believes, with valuation suggesting a 20% free cash flow yield for 2022.
Target falls to $3.30 from $3.60, Outperform retained.
Target price is $3.30.Current Price is $2.65. Difference: $0.65 – (brackets indicate current price is over target). If 29M meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges – negative figures indicate an expected loss).
