G Mining Ventures guidance positions Tocantinzinho as low-cost, high-margin mine, analysts say
Published: 12:48 21 Jan 2025 EST
Analysts at Jefferies have reiterated that G Mining Ventures Corp (TSX:GMIN, OTCQX:GMINF) is their top pick stock for 2025 after the miner released its 2025 production and cost guidance.
Production guidance of 175,000 to 200,000 ounces is in line with the analysts’ estimate of 185,000 ounces.
They believe G Mining’s all-in-sustaining cost (AISC) guidance of $995 to $1,125 per ounce, below their $1,198 estimate, marks a major derisking milestone for the company’s Tocantinzinho (TZ) Gold Mine in Brazil.
“G Mining’s 2025 guidance calls for production that is largely in line with the 2022 Feasibility Study (FS) mine plan at AISC of $995 to $1,125 per ounce, below our $1,198 per ounce estimate and the sector average of approximately $1,500 per ounce, marking a major derisking milestone that solidifies TZ as a low cost, high-margin operating mine,” they wrote.
Cash costs of $590 to $655 per ounce were significantly lower than their $841 per ounce projection, as G Mining reallocated approximately $124 per ounce of capitalized waste stripping costs into sustaining capex, consistent with the World Gold Council’s accounting guidelines.
This adjustment led to higher sustaining capex of approximately $380 per ounce, up from the analysts’ prior estimate of approximately $250 per ounce, effectively balancing out the AISC, as lower cash costs were offset by increased sustaining capex.
“Focus now turns to Oko West where nearly a quarter of its total initial capex requirements will be spent in 2025 as permitting, FS and financing milestones are delivered through the year,” analysts wrote.
Jefferies repeated their ‘Buy’ rating and C$17 price target on G Mining, which traded hands at C$13 in the early afternoon on Tuesday.
“We adjusted our model to reflect G Mining's accounting treatment of capitalized stripping which resulted in lower cash costs, higher sustaining capex, but a largely unchanged AISC estimate. We also aligned our model to guidance,” they concluded.
