Go for CNMC Goldmine: KGI Fraser

SINGAPORE (June 21): KGI Fraser Securities has initiated coverage on Malaysian low-cost gold producer CNMC Goldmine at a “strong buy” with a target price of 48 cents.

“CNMC’s current trading price mirrors a gold price of at most US$1,070 ($1,437.12)/ozt. This implies that there is a huge valuation gap that needs to be closed,” says analyst Renfred Tay in a Monday report. He believes there is “much headroom” for the producer’s valuation to run before the movements of its stock price can be justified by changes in gold prices.

The company announced last month that its net profits for 1Q16 had more than doubled from the same period last year. In January this year, CNMC also revealed a record-setting gold production output of 31,205.9 ounces (970.6 kg) in FY2015 – the highest figure since its gold production commenced in July 2010.

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