Aurelia Metals Ltd (ASX: AMI) recently released its third-quarter report, prompting the gold analysts at both Moelis and Shaw and Partners to take a closer look at the company.
Both have rated the company a buy and have bullish price targets on the gold producer. We'll get to the details of those forecasts later.
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Solid quarter
Firstly, let's have a look at what Aurelia reported this week.
The company said it had produced 13,000 ounces of gold during the March quarter, as well as 600 tonnes of copper, 6,900 tonnes of zinc, and 4,300 tonnes of lead.
The company's cash balance increased from $85.6 million at the end of December to $94.7 million at the end of March.
Aurelia also increased its full-year production guidance, saying gold production was now expected to come in at 45,000 to 50,000 ounces, compared with the previous guidance of 35,000 to 40,000 ounces.
Forecast copper production, however, reduced from 3,000 to 4000 tonnes to 2.5-3000 tonnes.
Growth capital spending would also be reduced to $45 to $60 million from $65 to $70 million, due to some deferrals.
Aurelia also said its process plant expansion project was on track to increase capacity from 800,000 tonnes per annum to 1.1 to 1.2 million tonnes per annum, with ramp-up planned throughout FY27.
Managing Director Bryan Quinn said regarding the quarter:
The March quarter delivered higher gold production of 13koz, free cash flow generation, and improved FY26 gold guidance. Costs were in line with guidance and free cash flow was generated after adding to restricted cash for rehabilitation bonds, investments in growth capital and payment of taxes. This was achieved while also building ROM stocks at Peak during the quarter, in preparation for production growth in future quarters. The March quarter also saw us progress the refinancing process, culminating in execution of a financing commitment letter as announced in early April. This materially strengthens the balance sheet and enhances liquidity, positioning Aurelia to execute its strategy with greater flexibility and confidence.
Consensus is that shares look cheap
The analyst team at Moelis said Aurelia's quarterly was "reasonably consistent with our expectations", and demonstrated that the company could generate meaningful cash flow while concurrently executing multiple growth initiatives.
They added:
If AMI can sustain the drumbeat of delivery, we expect the stock to progressively rerate – shedding the discount it has carried since the material downgrade in the middle of CY25. With favourable metal prices, the business is well placed to convert improving production outcomes into accelerating near-term cashflow.
Moelis has a buy rating and a price target of 42 cents on Aurelia shares, compared with 28 cents currently.
Meanwhile, the team at Shaw and Partners called it "another strong quarter".
They noted that the company's growth projects were on track, while the company was also looking for a new Chief Executive, which should also provide impetus.
Shaw and Partners has a 50-cent price target on Aurelia shares.
Aurelia Metals is valued at $448.8 million.
