On Wednesday, Canaccord Genuity initiated coverage on Amaroq Minerals Ltd (LON:AMRQ:LN) stock with a Speculative Buy rating and a price target of GBP1.25. The firm highlighted the company's focus on the high-grade Nalunaq gold mine in southern Greenland, which is nearing the completion of construction and is set to restart operations this quarter.
Amaroq Minerals is also on track to complete its Phase 1 processing plant in the fourth quarter of 2024, with the first gold pour expected by the end of the year. The company anticipates beginning the commissioning of the plant in the first half of 2025. Canaccord's analysis projects a conservative estimate of 20,000 ounces of gold production from Nalunaq in 2025, with production anticipated to increase to 43,000 ounces once the mine reaches full Phase 1 capacity in 2026.
The financial outlook for Amaroq Minerals appears positive, as the company is expected to become operating cash flow positive in 2025. Furthermore, following the completion of Phase 2 of the processing plant, Amaroq is forecasted to turn free cash flow positive in 2026. Over the past twelve months, the company has significantly restructured its finances, which is expected to contribute to a robust balance sheet throughout the commissioning period in 2025.
Canaccord's initiation of coverage with a Speculative Buy rating reflects the firm's optimism about Amaroq Minerals' prospects, particularly with the impending restart of the Nalunaq gold mine and the progression towards gold production. The price target of 125 pence underscores the potential value Canaccord sees in the company as it advances its mining operations and financial position.
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