Berenberg says ACG Metals Ltd (LSE:ACG, OTC:ACGAF) is "picking up steam" following a strong first-half operational update, leading to a 17% upgrade in 2025 gold-equivalent production guidance and confirming the company’s expansion remains on schedule.
The broker raised its price target to 820p and reiterated a 'buy' rating.
The upgrade follows a solid first-half performance from ACG’s Gediktepe mine in Turkey, which produced 18,200 ounces of gold and 374,000 ounces of silver.
The revised 2025 guidance now targets 36,000 to 38,000 ounces of gold-equivalent production, up from the previous range of 30,000 to 33,000 ounces.
This boost comes at a time when gold and silver prices are near record highs, providing a favourable market backdrop.
ACG also showed strong cost discipline, with half-year cash costs of $366 per ounce, well below Berenberg’s forecast of $626 per ounce.
While all-in sustaining costs remain in line with expectations, this cost efficiency supports higher earnings estimates for 2025.
The company has drawn down $108 million of its $200 million bond to fund the Sulphide Expansion Project (SEP) and repay acquisition loans, leaving net debt at USD66 million at period-end.
The SEP is progressing smoothly and remains on schedule and within budget for commissioning in the first quarter of 2026.
Once complete, Gediktepe will transition to generate about 45% of revenues from copper, with zinc, gold, and silver credits supporting a strong EBITDA margin of roughly 45% over an initial 10-year mine life.
There is also promising potential to extend the mine’s life beyond this period.
Berenberg values ACG using a blend of net asset value and forward EBITDA, resulting in the 820p price target.
The shares currently trade at 0.8 times net asset value and 4.3 times estimated 2025 earnings.
With steady operational delivery, a growing copper exposure, and a leadership team experienced in M&A, the company is well positioned for growth and a potential re-rating, the broker reckons.
The shares rose 4% to 640p.