Caledonia Mining has its price target tweaked higher by broker Liberum, which said it now expects the Bilboes project in Zimbabwe to be developed in stages rather than in one go.
Bilboes can quadruple Caledonia’s annual production to around 220,000 oz a year of gold at one stoke, suggests the broker based on a feasibility study carried out for the vendors,
The project already has an existing heap leach facility that historically produced up to 20,000 oz/year and Caledonia anticipates recovering gold from March, with production this year guided to be 12.5-17,000oz.
“Aside from generating small but useful cashflows, the oxide operation will effectively be pre-stripping the much larger underlying sulphide project, thereby improving the economics of the project,” said Liberum.
Its share price target rises to 1,305p from 1,266p with ‘buy’ its investment rating.