Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Caledonia Mining attractive on number of fronts suggests Canaccord

Caledonia Mining attractive on number of fronts suggests Canaccord

Gold miner Caledonia Mining (LON:CMCL TSE:CAL) could have almost as much spare cash as its current value in two years time, underlining its appeal says broker Canaccord. 

The broker says the investment case for Zimbabwe-focused Caledonia is based on four key pillars: a proven track record of delivery; a completed indigenisation process; a five year plan to increase production by 90% and dividend potential after the recent maiden dividend of C$0.005/share.

“With the net cash balance building, Caledonia offers a premium dividend, production and earnings growth versus peers,” says the broker.

 The company trades on a 65% discount to peers on three key metrics, while average annual free cash flow will be US$33m over the next 5 years. 

This will allow the company to fund its 5-year investment programme of US$37m internally, while leaving ample room for dividend growth, argues Canaccord.

It has a target price of 16p/share, and forecasts Caledonia will have US$55m in net cash by the end of 2014, equal to 90% of the current market capitalisation.

"This should draw attention to the group’s attractive  cash flow, while an initial resource estimate at the Zambian copper asset (due mid-2013) provides further upside."

Shares were 7.09p today.


PhilW.jpg
Why Invest In Caledonia Mining Corporation? Read More Here

Register here to be notified of future CMCL Company articles
View full CMCL profile

Caledonia Mining Corporation Timeline

Related Articles

Picture of gold and dollars
August 03 2016
Earnings for the year to June will be at least double last year with production also ahead of target it said in August
picture of gold pour
November 10 2016
Kiziltepe is just 75km away and the plan will be for Tavsan to use a lot of its infrastructure for processing.
gold-pour.jpg
September 25 2016
Shares in Condor Gold have tripled this year as the gold price recovers and the market wakes up to the value of its La India gold asset.

© Proactive Investors 2016

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.