Lim & Tan Securities Research Report March 20, 2025

Riding the Gold Rush: CNMC Goldmine’s Soaring Potential

Capitalizing on Record-Breaking Gold Prices

CNMC Goldmine (S$0.335, up 0.5 cts) remains a prime beneficiary of rising gold prices amidst global uncertainties and increasing demand for the safe-haven asset. We expect the company to ramp up production this year through 1) expanding its carbon-in-leach (CIL) plant to increase processing capacity by 60%, and 2) building its second underground gold mining facility to extract higher-grade gold ores. Higher production will allow CNMC to capitalize on rising gold prices which is forecasted to remain strong in 2025.
FY24 results came within our expectations with revenue and net profit coming in at 104%/98% of our full year forecast. Revenue rose 25% yoy to US$65.2mln from higher gold prices and increased production from its flagship Sokor mine. Average gold prices have risen from USD1,960/oz in 2023 to USD2,455/oz in 2024, before reaching an all-time-high and breaking the psychological USD3,000/oz milestone in Mar’25.

Doubling Down on Production Capacity

To capitalize on rising gold prices this year, CNMC will be expanding its carbon-in-leach (CIL) plant by 60% in 1H25 and constructing its second underground gold mining facility to be ready by 2H25. The upgraded CIL plant will come with a dual operating system to keep it running at all times. With the new facility in operation, this eliminates downtime and ensures uninterrupted production if either the original 500-tonne-per-day facility or the new 300-tonne-per-day facility undergoes maintenance or repair.
As highlighted by CNMC Goldmine’s CEO Mr Chris Lim during the FY24 announcement: “We are going full steam ahead to scale up production as we want to take full advantage of the run-up in gold prices. Our base metals operation is also making good progress. Overall, we are cautiously optimistic about the foreseeable future and hope to do even better this year.”

Robust Fundamentals and Attractive Valuation

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$17.9mln (18% of market cap), we forecast earnings growth of 21%/6% in FY25F/FY26F which translates into a decent 5.1% forward dividend yield based on an unchanged 43% payout ratio.
CNMC’s market cap stands at S$136mln and trades at 8.5x forward P/E and 2.1x P/B, with a dividend yield of 4.2%. Gold prices rose 26% in 2024 and continued its rise in 2025, hitting an elevated USD3,050/oz today. Sky-high gold prices, coupled with an increase in gold output as targeted by the company, will render 2025 a year to watch. We maintain BUY on CNMC Goldmine with a higher target price of S$0.48 (previous TP: S$0.43), pegged to 12.1x FY25F P/E (peers average) and DCF.