Fortunately for investors, there are a lot of options to choose from in the Australian gold sector.
One ASX 200 gold stock that could be worth considering according to Bell Potter is Genesis Minerals Ltd (ASX: GMD).
In fact, the broker thinks this miner could be cheap at current levels. Let's see what it is saying about this stock.
Image source: Getty Images
What is the broker saying?
Bell Potter notes that it is expecting the ASX 200 gold stock to deliver production a touch ahead of consensus expectations in the third quarter.
And while this still means lower production quarter on quarter, this is due to downtime relating to a change of contractor at the Gwalia operation.
In addition, the broker is expecting only a minor impact to costs from higher diesel prices for this quarter. However, it sees potential for costs to rise in future quarters if availability issues remain. It explains:
We forecast 3Q production of ~70koz (VA 69.5koz) which implies a slight reduction on QoQ production (74koz). We had assumed some downtime/ interruptions in productivity at Gwalia due to the change over in contractors, resulting in a forecast that was more conservative. Elsewhere, we see a continuation in performance from 2Q, with total processed grade declining slightly (2.3g/t to 2.1g/t). Our internal modelling suggests a minor impact to AISC from rising diesel costs with diesel representing ~4% (A$108/oz) of AISC prior to the closure of the Strait of Hormuz.
Assuming a ~75% increase in diesel costs sees the impact jump to ~A$199/oz. Should availability issues persist, GMD will be impacted alongside the rest of the WA mining industry, however there may be some internal levers which GMD may be able to pull to minimize the impact, focusing on Gwalia and stockpiled material through the mill would be the starting point.
An ASX 200 gold stock offering compelling value
In light of the above, Bell Potter believes that Genesis Minerals shares offer "compelling value" at current prices.
This is especially the case give its positive view on the gold price outlook. It explains:
We remain positive on the outlook for gold, given the ongoing tensions in the Middle East which has seen the commodity recover from recent lows of ~US$4,130/oz up to spot of ~US$4,746/oz (+15% from the low, -7.9% MoM). The GDX appears to have outperformed the underlying commodity, with MoM decline of only -3.16% and a rally from the low in Mar-26 of ~23%. On a 12m forward EV/EBITDA basis GMD has contracted to ~6.2x NTM EBITDA vs its peak of ~8x in Sep-25.
This places GMD slightly above Northern Star (NST, Buy TP$35) (5.1x NTM) but below Evolution (EVN, Buy TP$16.60) (7.1x NTM) in our mid-large cap gold coverage. The upcoming (1QFY27) long-term guidance targeting 500kozpa is likely to focus on two aspects we believe: (1) development of Tower Hill and a standalone 3.5-4Mtpa mill which should offset higher cost processing at Leonora and (2) development for Lady Julie (MAU transaction) which would supplement the Laverton mill with higher grade tonnes.
According to the note, Bell Potter has put a buy rating and $9.90 price target on the ASX 200 gold stock.
Based on its current share price of $6.47, this implies potential upside of 53% for investors over the next 12 months.
