CNMC Goldmine: Riding the Gold Price Wave to New Heights
Lim & Tan Securities | March 20, 2025
CNMC Goldmine’s FY24 results came within our expectations, with revenue and net profit reaching 104% and 98% of our full-year forecast, respectively. Revenue rose 25% year-over-year to US$65.2 million, driven by higher gold prices and increased production from the company’s flagship Sokor mine. Average gold prices have risen from US$1,960/oz in 2023 to US$2,455/oz in 2024, before reaching an all-time high of over US$3,000/oz in March 2025. Full-year net profit came in at US$9.8 million, an increase of 140% year-over-year and the company’s best performance since FY15.
Capitalizing on Rising Gold Prices
CNMC Goldmine remains a prime beneficiary of rising gold prices amidst global uncertainties and increasing demand for the safe-haven asset. Gold prices are expected to remain strong in 2025, with Goldman Sachs forecasting US$3,100/oz and JP Morgan projecting US$3,150/oz by the end of the year. Analysts believe the Trump government’s aggressive and unpredictable trade policies are one of the main drivers for gold in 2025.
Expanding Production Capacity
To capitalize on rising gold prices, CNMC is forging ahead to ramp up production at its Sokor Gold Field by improving productivity and upgrading its mining facilities. The company will be expanding its carbon-in-leach (CIL) plant by 60% in the first half of 2025 and constructing its second underground gold mining facility to be ready by the second half of 2025. The upgraded CIL plant will come with a dual operating system to ensure uninterrupted production and eliminate downtime.
Financial Highlights
| Dec YE |
FY22 |
FY23 |
FY24 |
FY25F |
FY26F |
| Revenue (US\$m) |
25.6 |
52.2 |
65.2 |
74.5 |
79.3 |
| EBITDA (US\$m) |
6.6 |
12.6 |
24.2 |
27.7 |
29.3 |
| EBITDA Margin (%) |
25.8 |
24.2 |
37.2 |
37.1 |
36.9 |
| Net Profit to Equity Holders (US\$m) |
0.1 |
4.1 |
9.8 |
11.8 |
12.5 |
| P/E (x) |
837.5 |
24.6 |
10.3 |
8.5 |
8.0 |
| P/B (x) |
2.6 |
2.5 |
2.1 |
1.8 |
1.6 |
| ROE (%) |
0.3 |
9.9 |
20.6 |
21.4 |
20.1 |
| EPS (S¢) |
0.04 |
1.36 |
3.24 |
3.92 |
4.18 |
| EPS Growth (%) |
-92.9 |
3300.0 |
138.2 |
21.1 |
6.4 |
| DPS (S¢) |
0.2 |
0.9 |
1.4 |
1.7 |
1.8 |
| Dividend Yield (%) |
0.6 |
2.7 |
4.2 |
5.1 |
5.4 |
Maintaining a Buy Recommendation
We maintain a BUY recommendation on CNMC Goldmine with a higher target price of S$0.48 (previous TP: S$0.43) as we roll forward valuations to 2025. Our target price is pegged to a blend of 12.1x FY25F P/E (peers average) and DCF.
CNMC is set to sustain its growth trajectory through higher gold prices and increased production of gold ore and base metals. Backed by a net cash of US$17.9 million (18% of market cap), we forecast earnings growth of 21% and 6% in FY25F and FY26F, respectively, which translates into a decent 5.1% forward dividend yield based on an unchanged 43% payout ratio.
While smaller than many of its larger-cap peers, CNMC’s gold resources (Measured, Indicated & Inferred) remain plentiful to last the next 20-30 years at least, based on the current production rate. CNMC’s price-to-book is in line with peers but possesses a superior ROE and dividend yield. Valuations are at a significant discount to peers, rendering CNMC an attractive counter to look into at current price levels.
Key Risks
Exposure to gold prices: CNMC Goldmine is a price taker with no control over gold prices, which are determined by market forces. A drop in gold prices due to external factors may affect the company’s revenues, profits, and mine valuations.
Reliant on gold mining permits: As a mining company, CNMC is required to seek governmental permits for exploration and mining operations. The group’s mining rights for the Sokor Gold Field are valid until 2034, and further extensions are dependent on the Malaysian regulatory authorities.
