CNMC Gold Maintains Buy Rating Despite Production Headwinds, Target Price Cut to S$2.03 August 24, 2026

Phillip Securities Research has maintained its BUY recommendation on CNMC whilst cutting its target price to S$2.03 from S$2.34, as higher gold prices help offset declining production volumes from the company’s mining operations.

Company Overview

CNMC operates gold mining activities with fine gold comprising approximately 76% of its total revenue. The company is currently undertaking a significant US$12 million underground mine construction project at New Found and Manson’s Lode, targeted for completion by the end of 2027.

Strong Financial Performance Despite Volume Challenges

The company demonstrated resilient financial performance in the first half of fiscal 2026, with revenue increasing 23.4% year-on-year to US$65.2 million and profit after tax and minority interests rising 17.8% to US$18.6 million. This growth was primarily driven by a substantial 40% increase in fine gold’s average selling price to US$4,486 per ounce.

Key Positives Supporting Performance

Fine gold revenue, which represents the company’s largest revenue stream, surged 31% year-on-year to US$49.8 million despite lower production volumes across all metals. The significant price appreciation in precious metals proved crucial, with gold prices rising 40% and silver prices increasing by an impressive 95% year-on-year. This pricing strength successfully offset the negative impact of reduced mining volumes.

The underground mine construction project continues to progress according to schedule, with both the hoisting system and surface infrastructure already completed at New Found and Manson’s Lode sites. The next phase involves shaft excavation as part of the comprehensive development programme.

Operational Challenges and Revised Outlook

However, the company faces production headwinds from lower-grade ore extraction through open-pit mining operations. This has prompted Phillip Securities Research to reduce its fiscal 2026 earnings forecast by 18%, reflecting a 7% reduction in the gold average selling price assumption to US$4,500 per ounce and a 16% decline in expected production volume to 23,957 ounces.

The mining operations also contend with higher diesel prices and the challenge of spreading fixed costs over lower output levels, which impacts operational efficiency.

CNMC currently trades at 11.7 times forward fiscal 2026 price-to-earnings ratio. The valuation methodology excludes terminal value assumptions, with the analysis based on the mining permit’s validity through 2034.

Frequently Asked Questions

Q: What was CNMC's financial performance in 1H26?

A: Revenue increased 23.4% year-on-year to US$65.2 million whilst profit after tax and minority interests rose 17.8% to US$18.6 million, primarily driven by higher gold prices.

Q: How much did gold prices increase during the period?

A: Fine gold's average selling price increased 40% year-on-year to US$4,486 per ounce, with gold comprising approximately 76% of total company revenue.

Q: What is Phillip Securities Research's recommendation and target price?

A: The firm maintains a BUY rating whilst reducing the DCF target price to S$2.03 from the previous S$2.34.

Q: What are the main challenges facing CNMC's production?

A: The company faces lower-grade ore from open-pit mining operations, higher diesel costs, and fixed costs being spread over reduced output levels.

Q: What is the status of the underground mine construction project?

A: The US$12 million project at New Found and Manson's Lode has completed the hoisting system and surface infrastructure, with shaft excavation planned next for completion by end-2027.

Q: Why did analysts cut their earnings forecasts?

A: Phillip Securities Research reduced FY26 earnings estimates by 18%, reflecting a 7% cut in gold price assumptions and 16% decline in expected production volume.

Q: What is CNMC's current valuation multiple?

A: The company trades at 11.7 times forward FY26 price-to-earnings ratio, with no terminal value assigned due to the mining permit expiring in 2034.

CNMC Gold Maintains Buy Rating Despite Production Headwinds, Target Price Cut to S$2.03

This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.

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