Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) market value presents an opportunity according to stockbroker Cavendish – which, with a 1,800p price target, pencils in some 95% upside potential.
The Zimbabwe-based miner today released annual results that Cavendish analyst Will Dymott described as ‘in line with our expectations’, and confirmed that it had made a strong start to 2025.
Caledonia reported o perating cash flow totalled $42 million, from $14.8 million, on 76,656 ounces of gold production.
Gross revenue rose to $183 million, from $146.3 million in 2023, whilst gross profit increased by 86% to $77 million. The company, meanwhile, reported a net attributable profit of $17.9 million versus a $7.9 million net loss in the prior year.
“Our financial performance benefited from a higher gold price environment, which resulted in a significant increase in gross profit and operating cashflows,” chief executive Mark Learmonth said.
Learmonth, meanwhile, highlighted that Caledonia’s strategic vision remains to become a multi-asset, Zimbabwe-focused gold producer – with immediate attention on the Bilboes mine, where extended feasibility work is expected unearth cost-saving opportunities and enhance project economics.
Reacting to the results, meanwhile, Cavendish analyst Will Dymott said he values Caledonia at $448 million – which equates to £1,800 per share (sum of the parts), with the flagship Blanket mine underpinning the valuation for $276 million, based on long term gold prices of $2,200 per ounce.
In other words, very little value for the Bilboes mine is currently in the Caledonia price, according to Dymott’s maths.
The analyst says he expects the discount in valuation will reduce, as the Bilboes project is derisked upon release of the feasibility study.
“Caledonia is trading at a significant discount to its peers, with Blanket providing cashflow, and a steady dividend and further growth from Bilboes and exploration upside from Motapa in the pipeline as gold trades at record highs,” the analyst added.
In London, Caledonia shares are priced at around 928p.