Capricorn Metals Ltd (ASX: CMM) shares are having a good session.
In afternoon trade, the ASX 200 gold share is up 4% to $4.69.
Investors have been buying the gold miner's shares for a couple of reasons.
One is a positive session for the gold sector, the other is a bullish broker note out of Bell Potter.
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What is the broker saying about this ASX 200 gold share?
Bell Potter was pleased with the company's performance during the December quarter. It commented:
CMM has reported December quarter 2023 production of 30.4koz gold (vs BPe. 29.4koz gold) from its 100%-owned Karlawinda Gold Project (KGP) in WA. All-In Sustaining-Costs (AISC) were A$1,333/oz (vs BPe A$1,324/oz). The production result was slightly ahead of our expectations and AISC effectively in-line with our forecast.
The broker believes this leaves it well-positioned for the remainder of FY 2024. It adds:
It was another solid operational performance with YTD production and costs in-line with the midpoint of FY24 guidance run-rate, setting CMM up for another year of consistent delivery.
Major upside potential
In light of the above, the broker has retained its buy rating and lifted its price target on the gold share to $5.95.
Based on its current share price, this implies potential upside of 27% for investors over the next 12 months.
Bell Potter commented:
Our higher gold price forecasts are partially offset by more conservative assumptions on costs and recoveries in the medium term. Our NPV-based valuation is up 4% to $5.95/sh. CMM is a sector leading gold producer with a strong balance sheet and a management team with an excellent track record of delivery. Its costs are among the lowest in the sector and it consistently generates strong cash margins. Retain Buy.
