On Tuesday, BMO Capital Markets updated its financial outlook for Centerra Gold Inc. (CG:CN) (OTC: CAGDF) shares, raising the price target to C$12.00 from the previous C$11.00. The firm has maintained an Outperform rating on the company's stock.
The revision follows the completion of a definitive feasibility study (DFS) for Centerra's molybdenum business unit (MBU), which includes plans to restart operations at the Thompson Creek mine. The DFS revealed enhanced economic prospects compared to the preliminary feasibility study (PFS) from 2023, as well as a commercially optimized plan for the Langeloth metallurgical facility.
The BMO Capital analyst noted that while the MBU investment decision might not be particularly exciting for investors primarily interested in gold, the decision to restart the mine represents the most favorable option among the alternatives considered. The move is seen as providing low capital-intensive access to molybdenum prices and the possibility of a full or partial sale in the future.
The raised stock price target to C$12.00 reflects the improved economic outlook for the MBU following the DFS. The Outperform rating indicates that BMO Capital Markets expects Centerra Gold's stock to perform better than the average return of the stocks the firm covers over the next 12 months.
Centerra Gold Inc. is engaged in the operation, acquisition, exploration, and development of gold and copper properties. Its decision to restart the Thompson Creek mine is part of a broader strategy to capitalize on its molybdenum assets.
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