There are plenty of options for investors to choose from in the gold sector.
But one of the best right now could be the ASX 200 gold stock in this article.
That's the view of analysts at Bell Potter, who rate the gold miner highly.
Image source: Getty Images
Which ASX 200 gold stock?
Capricorn Metals Ltd (ASX: CMM) is the stock that Bell Potter is positive on.
It is the gold miner behind the 100%-owned Karlawinda Gold Project (KGP), which is located ~65km south-east of Newman in Western Australia.
Bell Potter notes that the ASX 200 gold stock has received the Federal approvals required for the expansion and operation of its Mount Gibson Gold Project (MGGP).
This is good news and marks a major permitting milestone that allows Capricorn Metals to finalise the primary Western Australian approvals required for the MGGP.
The broker believes this means the company is now in a more confident position to advance further long lead capital purchasing and contract execution in parallel with concluding the permitting process. As a result, it is now targeting the completion of permitting and commencement of development activities in the December quarter.
Commenting on the development, Bell Potter said:
This is a long-awaited permitting milestone that marks the end of what has been a drawn out 3.5-year process with the Federal regulator. The approval significantly derisks and clarifies the development and schedule for the MGGP, which is now targeting a construction start date in the December 2026 quarter. The WA permitting process is a more transparent and well-worn path. WA regulators have been closely engaged with the progress of the MGGP, giving us confidence in the December quarter target.
It then adds:
We now look forward to an updated Pre-Feasibility Study (PFS) for the MGGP which we expect to include the Orion underground Resource of 9.5Mt @ 2.9g/t Au for 895koz. Potential underground production here is over and above the base-case MGGP PFS, which outlines gold production of 150kozpa over an initial 15 year mine life. Meanwhile, the Karlawinda Expansion Project (KEP) is on target for commissioning in the September 2026 quarter. This is a key growth catalyst and will enable CMM to maintain continuity for its construction team and a smooth transition to development of the MGGP.
Big potential returns
According to the note, the broker has retained its buy rating on the ASX 200 gold stock with an improved price target of $16.70 (from $16.25).
Based on its current share price of $12.48, this implies potential upside of 34% for investors over the next 12 months.
Commenting on its buy thesis, Bell Potter said:
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 $16.70/sh. We retain our Buy recommendation.
