If you are wanting some exposure to the booming gold price, then read on!
That's because the team at Bell Potter has identified as ASX 200 gold stock that it believes could rise very strongly from current levels.
Which ASX 200 gold stock?
The gold miner that Bell Potter is bullish on this month is Catalyst Metals Ltd (ASX: CYL).
Catalyst Metals is a mid-tier Australian gold miner and developer with 100% ownership of two key projects. These are the Plutonic Gold Operation in Western Australia and the Bendigo Gold Project in Victoria. Bell Potter highlights that these assets are located in highly prospective, low sovereign risk jurisdictions.
What is the broker saying?
Bell Potter has resumed coverage on the ASX 200 gold stock and is feeling very positive due to its 10-year growth strategy. It explains:
We see CYL as an emerging mid-tier gold producer in Western Australia, operating within a stable, low-risk jurisdiction. The Company is embarking on a 10-year growth strategy for its Plutonic Gold Operations (PGO), targeting a 200kozpa production rate. This will be achieved by developing five mines under a hub-and-spoke model and leveraging latent processing capacity at the 1.8Mtpa processing plant.
Production is anticipated to double from 100kozpa in FY26 to 200kozpa from FY29 (~28% CAGR), due to the forecasted increase in tonnes and grade (3.13g/t vs 2.27g/t in FY26) as higher grade mines come online. CYL remains debt free with no gold hedging contracts, allowing full exposure to gold price upside, particularly attractive in the current gold bull market.
Big potential returns
According to the release, the broker has put a buy rating and $9.30 price target on the ASX gold stock.
Based on its current share price of $6.55, this implies potential upside of 42% for investors over the next 12 months.
Commenting on its buy recommendation, Bell Potter said:
We recommence coverage of CYL with a BUY recommendation and a $9.30/sh TP. CYL is considered undervalued against its peers (EV/EBITDA 5.3x, FY26E/27E FCF yield of 1.5% to 7.1%). We view CYL as derisking the Plutonic gold hub with a clear line of sight to a 200kozpa steady state (FY29). Execution on the plan (five mines feeding an underutilised 1.8Mtpa plant) and Reserve growth towards >2Moz are viewed as the key drivers of multiple re- ratings and margin expansion.
