Capricorn Metals Ltd (ASX: CMM) shares are on course to end the week in a positive fashion.
At the time of writing, the ASX 200 gold share is up almost 3% to $11.64.
This follows a rebound in the gold price overnight and the release of a bullish broker note out of Bell Potter.
Let's now see what the broker is saying about this gold miner.
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What is the broker saying?
Bell Potter was pleased with the company's performance in the third quarter. It highlights that production was in-line with expectations and costs came in lower than expected. It said:
CMM has reported March quarter 2026 production of 30.4koz gold (vs BPe. 30.6koz) from its 100%-owned Karlawinda Gold Project in WA. All-In-Sustaining-Costs (AISC) were A$1,617/oz (vs BPe A$1,649/oz). The production result was in-line with our forecasts and sustained a run-rate at the top of CMM's guidance range. AISC were 2% below our forecasts, reflecting strong cost control and a marginally lower strip ratio, partially offset by higher gold royalty charges.
While these are tracking to the top end of CMM's guidance range, they remain among the lowest in the sector. CMM is generating strong operating cash flows that are funding a major capital expansion project and an aggressive exploration program while adding cash to the balance sheet and supporting a maiden dividend distribution.
Another positive is the progress the ASX 200 gold share is making with its Karlawinda Expansion Project. The broker adds:
The Karlawinda Expansion Project (KEP) is progressing to schedule, with commissioning targeted for 1QFY27 and aiming to lift production to ~150kozpa. This is set to deliver the first of two major growth catalysts. CMM continues to await final statutory approvals for the Mt Gibson Gold Project (MGGP), which is set to add production of ~150kozpa over an 11 year mine life. Successful exploration continues to expand the potential of the MGGP, where wide, consistent high grade intercepts were recently reported, adding to the growth opportunity.
Should you buy this ASX 200 gold share?
According to the note, Bell Potter has retained its buy rating on Capricorn Metals shares with an improved price target of $16.25 (from $16.10).
Based on its current share price, this implies potential upside of almost 40% for investors over the next 12 months.
Commenting on its buy recommendation for the "sector-leading" gold miner, the broker said:
EPS changes in this report are: FY26: -6%; FY27: -2% and FY28: +13%. CMM is a sector leading gold producer, unhedged and debt free. It is fully funded to grow production from ~120kozpa to ~300kozpa from two gold mines in WA, each with +10 year mine lives. CMM is run by a management team that has an excellent track record of delivery. Our NPV-based valuation is up marginally to $16.25/sh. We retain our Buy recommendation.
