Update shared on 12 Dec 2025
Fair value Increased 61%Analysts have sharply raised their price target on Caledonia Mining from 28.00 dollars to 45.00 dollars, citing a reassessment of revenue growth prospects and valuation multiples, despite expectations for higher discount rates and lower profit margins.
What's in the News
- Caledonia approved single phase development of the fully permitted Bilboes Gold Project in Zimbabwe, targeting first production in late 2028 and steady state output in 2029, with a post tax NPV 8% Real of USD 1.23 billion and IRR above 50% at the September 2025 LBMA spot price (company announcement)
- The Bilboes project funding plan calls for peak project funding of USD 484 million plus about USD 150 million for interest, working capital and cost overrun facilities, with a strategy focused on minimising equity issuance to protect per share NPV (company announcement)
- Caledonia maintained its 2025 gold production guidance at 75,500 to 79,500 ounces, reiterating confidence in its operational outlook (company guidance)
- Quarterly gold production for Q3 2025 rose slightly to 19,106 ounces, bringing nine month 2025 output to 58,846 ounces, up from 56,815 ounces a year earlier (operating results)
- Caledonia was added to the S&P/TSX Global Mining Index, increasing its visibility among institutional and index tracked investors (index announcement)
Valuation Changes
- The fair value estimate has risen significantly from $28.00 to $45.00 per share, a 60.7 percent increase.
- The discount rate has increased moderately from 7.83 percent to 9.10 percent, reflecting a higher required return.
- The revenue growth assumption has shifted from a modest decline of 2.88 percent to positive growth of 6.94 percent, indicating a more optimistic top line outlook.
- The net profit margin expectation has fallen sharply from 48.85 percent to 16.41 percent, implying a materially lower long term profitability profile.
- The future P/E multiple has expanded substantially from 7.8x to 25.5x, signalling a higher valuation being applied to forward earnings.
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