29Metals Broker Ratings Oct-23

Macquarie –  Macquarie noted that 29Metals’ recent quarterly report showed decreased production volumes. However, on the flip side, the costs also reduced. The broker emphasises that Capricorn successfully resumed production in the third quarter, delivering 1.1kt of copper. The broker predicts that this output will triple in the fourth quarter to 3.4kt as production continues to ramp up. 29Metals has stuck to its 2023 financial, cost, and production forecasts, which include 24-29kt of copper and 54-61kt of zinc. Macquarie views this consistency as a definite plus.

Morgan Stanley – 29Metals’ third-quarter copper production outperformed Morgan Stanley’s and the general consensus forecasts by 8% and 10%, respectively. This was attributed to increased milling rates and better grades at Golden Grove, though it was somewhat counterbalanced by a dip in production at Capricorn Copper. The zinc production, on the other hand, fell short of both the broker’s and consensus predictions by 44%. This was mainly due to considerably lower grades, which analysts believe might have occurred because the copper stopes were given priority.

Ord Minnett – In the September quarter, 29Metals reported a dip in production. While copper production was robust, it couldn’t entirely make up for the lower-than-anticipated zinc output. The capital expenditure was also below expectations, mainly due to postponements and deferred spending. Ord Minnett still sees potential in 29Metals, noting that the stock is trading below its target price. However, they remain cautious due to the associated risks, which prevent a more optimistic view.