Oleblue
2月前
Is Caledonia Mining (CMCL) Among the Best Precious Metals Stocks to Buy According to Analysts?
Gold: What to know about the most crowded trade on Wall Street
Hamna Asim
April 25, 2025
In This Article:
We recently published a list of 13 Best Precious Metals Stocks to Buy According to Analysts. In this article, we are going to take a look at where Caledonia Mining Corporation Plc (NYSEAMERICAN:CMCL) stands against other best precious metals stocks to buy according to analysts.
Gold prices set new records in early 2025, driven by growing interest in gold as a safe haven asset amid rising tariffs and trade wars between the United States and China. The precious metal exceeded $3,000/oz recently. Lately, gold is acting both as a hedge against inflation and a competitor to yield-earning assets like the US Treasurys. This has created what analysts call a “smile profile,” where gold tends to go up whether US yields rise or fall. Natasha Kaneva, head of Global Commodities Strategy at J.P. Morgan, commented:
“We maintain our multi-year bullish outlook on gold. From a macro perspective, a universal tariff scenario would likely supercharge the broad price effects for precious metals. Boosted economic growth concerns and higher inflation risks could continue to fuel strong investor demand for gold.”
Similarly, Jim Wyckoff, a senior analyst at Kitco Metals, said on April 15:
“Traders are waiting for the next major fundamental development to drive the gold market, but the charts remain bullish. There’s still safe-haven demand.”
In line with that, European private banking firm Commerzbank wrote in a note to investors:
“The rise in the gold price is also partly in line with the continuing weakness of the dollar, which points to a gradual erosion of the U.S. currency’s status as a safe asset – gold is likely to be an alternative for many USD investors.”
Goldman Sachs has lifted its gold price forecast from $3,300 to $3,700 per ounce by the end of 2025. This forecast is supported by higher central bank purchases and increased ETF inflows amid growing global economic uncertainty. President Trump’s unpredictable trade policies are the basis for this market upheaval. While gold remains a haven in volatile times, it lacks income-generating potential and incurs storage costs. Still, mining stocks are also gaining appeal, with lower energy costs boosting profits.
According to the Silver Institute, the silver market is moving towards its fifth consecutive year of a supply deficit in 2025, with demand exceeding supply again. Industrial use, especially in green tech, electric vehicles, and electronics, is driving much of this demand and is expected to reach a new record this year. Prices also rebounded in early 2025, partly due to growing uncertainty around President Trump’s potential tariff policies, which have resulted in more short covering and deliveries of silver into CME warehouses. At the same time, ongoing global and economic concerns have helped push investors back toward safe-haven assets like silver.
Still, silver investment has faced some challenges. Ongoing concerns about China’s economy have held back demand, and the persistently high gold-to-silver ratio suggests that investors still favor gold. Overall, silver demand is expected to stay steady at around 1.2 billion ounces. While industrial and retail investment will rise, jewellery and silverware demand, especially in India, is expected to fall due to high local prices.
Our Methodology
For this article, we searched multiple credible websites to compile a large list of US-listed precious metals stocks. Next, we manually searched for the average upside potential of each stock and selected 13 stocks with the highest values. The list below is ranked in ascending order of the upside potential as of April 16. We have also mentioned the hedge fund sentiment as per Insider Monkey’s database of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Caledonia Mining Corporation Plc (CMCL) the Best Precious Metals Stock to Buy According to Analysts?
Drills extracting gold from a gold mine, revealing the company's gold mining operation.
Caledonia Mining Corporation Plc (NYSEAMERICAN:CMCL)
Number of Hedge Fund Holders: 7
Average Upside Potential: 34.92%
Caledonia Mining Corporation Plc (NYSEAMERICAN:CMCL) is a Jersey-based gold mining company that owns a major stake in Zimbabwe’s Blanket Mine, as well as additional gold projects in Zimbabwe. On December 16, 2024, Maxim Group started coverage of CMCL with a Buy rating and a price target of $17. According to the investment firm, the company is on the path to solid growth, with gold production projected to reach 85,000 ounces by 2026 and a long-term goal of 200,000 ounces annually. The company plans to use its cash flow for mine development, new projects, and maintaining its 5.4% dividend.
Caledonia Mining Corporation Plc (NYSEAMERICAN:CMCL) achieved a new record at its Blanket Mine in Q1 2025, producing 18,671 ounces of gold, exceeding both last year’s 17,050 ounces and the last Q1 high set in 2022. The mine also milled over 201,000 tonnes of ore, exceeding expectations by 13.4%, which led to a growing surface stockpile as production outpaced milling capacity. The company is still on track to meet its 2025 gold production target of 74,000 to 78,000 ounces.
According to Insider Monkey’s Q4 database, 7 hedge funds held stakes in Caledonia Mining Corporation Plc (NYSEAMERICAN:CMCL), compared to 9 funds in the prior quarter. William B. Gray’s Orbis Investment Management was the largest stakeholder of the company, with 782,501 shares valued at $7.36 million.
Overall, CMCL ranks 10th on our list of best precious metals stocks to buy according to analysts. While we acknowledge the potential of precious metals stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CMCL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
https://finance.yahoo.com/news/caledonia-mining-cmcl-among-best-131130266.html
Weekly Chart
rmarc
4年前
Revisiting Caledonia Mining - No Developments On M&A And I Remain Bearish
Aug. 26, 2021 8:55 AM ETCaledonia Mining Corporation Plc (CMCL)1 Like
Gold Panda
Contributor Since 2015
- Disclosure: I am not a financial adviser. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading.
Summary
The company is on track to boost production at Blanket to 80koz per year by 2022.
The mine life stretches to 2034, but this is based on inferred resources.
Reserves at Blanket were just 527koz of gold as of the start of 2020 and Zimbabwe is a terrible mining jurisdiction.
Also, the Glen Hume property was impaired and there have been no updates on the potential purchase of the Isabella-McCays-Bubi mines.
I continue to be bearish and the short borrow fee rate stands at 1.69% as of the time of writing.
Bear icon
Maciej Koza/iStock via Getty Images
Investment thesis
In January, I wrote a bearish article on SA about Zimbabwe-focused gold miner Caledonia Mining (NYSE:CMCL). The company aimed to become a 500koz/year gold producer but the latest quarterly report looks unimpressive. Also, the Glen Hume property was impaired, and there have been no updates on the potential purchase of the Isabella-McCays-Bubi mines.
Caledonia's valuation has decreased significantly since my previous article but I remain bearish as the prospects for the company now look worse than before. Let's review.
Overview of the operations and the financials
In case you haven't read my previous articles on Caledonia, here is a quick overview of the operations. The company's main asset is a 64% interest in the Blanket gold mine, which is located on the northwest limb of the Gwanda Greenstone Belt in Zimbabwe. This is the largest gold mine in a belt which had 268 operating mines at its peak.
(Source: Caledonia Mining)
Blanket has so far produced over a million ounces of gold and its output stood at 16,710 ounces in Q2 2021. As you can see from the charts below, the grades have been decreasing over the past decade but the production has been improving as Caledonia keeps boosting the mined volume.
(Source: Caledonia Mining)
Caledonia's aim is to reach an annual production rate of 80,000 ounces of gold and is close to achieving this. Blanket is comprised of five significantly independent near vertical ore bodies and Caledonia the Central Shaft project last quarter. With this, July production reached almost 6,000 ounces. Overall, Caledonia has invested around $67 million into expanding its production rate since January 2015, which was fully funded from internal cash flows. This is impressive.
(Source: Caledonia Mining)
Blanket has a mine life stretching 13 years and is generating EBITDA of $14 million per quarter even before the expansion. Also, Caledonia has just around $0.2 million in debts and over $16 million in cash.
(Source: Caledonia Mining)
Why in the world would I be bearish on this one? Well, the main reasons are mining jurisdiction and reserves.
Zimbabwe is a terrible mining jurisdiction and this is why there are almost no mines left there today. The country has a history of nationalization plans for parts of its mining industry and is currently struggling with food and fuel shortages, electricity supply disruptions, soaring inflation, and an imploding currency.
Looking at the reserves, keep in mind that Blanket's 13-year mine life is based on resources. Sure, the mine has a very good track record of replacing reserves, but it's dangerous to base your mine life on inferred resources. As of January 2020, Blanket had proven and probable gold reserves of just 527koz.
(Source: Caledonia Mining, page 6 here)
If you take into account only measured and indicated resources, the mine life ends in 2026.
(Source: Caledonia Mining, page 131 here)
Oh and keep in mind that Caledonia owns less than two-thirds of Blanket, which means that the attributable reserves were just 337koz as of January 2020. With this in mind, Caledonia looks like a value trap.
Let's move onto why I think the prospects for the company now look worse than before. There are two main reasons. First, gold prices are lower today compared to January:
(Source: Gold Price)
Second, I'm unimpressed by the recent exploration and M&A developments. Caledonia disclosed in its Q2 financials that it impaired the Glen Hume property near Gweru following disappointing exploration results. That's $3.5 million down the drain.
(Source: Caledonia Mining, page 18 here)
In addition, there has been no development in regards to a rumor that Caledonia was planning to buy the mothballed Isabella-McCays-Bubi mines in northwest Zimbabwe. The latter is said to have the potential to produce over 200koz of gold per year. It seems that Caledonia Mining is back to focusing on Blanket and I just don't see a way the company can achieve its ambition of growing output to 500koz per year.
Caledonia has a market capitalization of $147.1 million as of the time of writing. Blanket had a net present value (NPV) of $191 million according to the May 2021 technical report.
(Source: Caledonia Mining, page 12 here)
Keep in mind that 64% of this sum is $122.2 million. In view of this, I think Caledonia looks overvalued and investors can take advantage of this by short-selling the shares. According to data from Fintel, the short borrow fee rate stands at 1.69% as of the time of writing.
Investor takeaway
I view Blanket as a relatively small gold mine that has pretty low all-in sustaining costs (AISC). The problem is that the mine is located in Zimbabwe and reserves are low. Caledonia has done a good job at Blanket over the past several years, but I just don't see a clear path to a production profile of 500koz per year anymore. The company is already valued at above its NPV and I think it deserves to be trading at a discount due to the jurisdiction. In light of this, I view the company as overvalued.
I see two major risks for the bear case at the moment. First, gold prices might increase in the future. Central banks across the world are currently injecting record amounts of liquidity into the financial system due to the Covid-19 pandemic and gold is seen by many investors as a safe haven against inflation and currency depreciation (personally, I prefer real estate). Second, Caledonia could have success on the exploration front over the next few years, thus significantly boosting reserves. This, in turn, would increase Blanket's NPV.
JD400
4年前
New Caledonia leaders agree terms for sale of Vale nickel mine
Mar 4, 2021 8:05AM EST
Political parties in New Caledonia on Thursday agreed new terms for the sale of Vale's nickel business, including a proposed majority stakeholding for local interests, seeking to resolve unrest over the planned sale.
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Adds Trafigura reaction, environment commitments
PARIS, March 4 (Reuters) - Political parties in New Caledonia on Thursday agreed new terms for the sale of Vale's VALE3.SA nickel business, including a proposed majority stakeholding for local interests, seeking to resolve unrest over the planned sale.
Brazilian miner Vale's VALE3.SA decision last year to sell its nickel mine and processing plant in the French Pacific territory to a consortium including Swiss commodity trader Trafigura TRAFGF.UL sparked fierce opposition from pro-independence groups.
Violent protests led Vale to shut down the site in December.
Under Thursday's agreement, pro-independence and loyalist leaders proposed that a 51% stake in the Vale operations be held by New Caledonia's provincial authorities and other local interests. Trafigura would have a 19% stake, less than the 25% planned in the initial sale deal with Vale.
The text released by the New Caledonian parties also mentioned a "technical and industrial partnership" with Tesla TSLA.O, under which the electric car company would source raw materials for batteries.
The parties also called for reinforced environmental standards and set a target for the mining complex to be carbon neutral by 2040.
Trafigura said it welcomed the political agreement.
"We're looking forward to operations resuming and for final completion of the transaction as soon as possible," a Trafigura spokesperson said.
Vale and Tesla did not immediately respond to requests for comment.
New Caledonia is the world's fourth-largest nickel producer behind Indonesia, the Philippines and Russia.
Demand for nickel, mainly used in making stainless steel, is expected to grow rapidly owing to increased demand for batteries for electric vehicle.
(Reporting by Gus Trompiz and Eric Onstad Editing by David Goodman )
https://www.nasdaq.com/articles/new-caledonia-leaders-agree-terms-for-sale-of-vale-nickel-mine-2021-03-04
NYBob
5年前
Caledonia eyeing one of Zimbabwe’s largest gold mines
October 21, 2020 Staff Reporter Business 0
Photographer: Waldo Swiegers/Bloomberg
HARARE (Bloomberg) — Caledonia Mining Corp., is interested in buying one of Zimbabwe’s largest gold operations as it embarks on an aggressive plan to acquire more assets in the country, according to a person familiar with the details.
The Jersey-based gold producer is weighing an acquisition of Bilboes Gold Ltd.’s Isabella-McCays-Bubi mines, in northwest Zimbabwe, said the person, who asked not to be identified as the details aren’t public.
A Caledonia spokeswoman declined to comment.
Bilboes Chief Executive Officer Victor Gapare said the company is looking for investors but is not holding talks with Caledonia. “Every gold mine in Zimbabwe, without exception, is looking for money and it’s not a secret,” Gapare said. “Yes, we were on the market, but there is absolutely nothing in us talking to Caledonia.”
The mines can potentially produce more than 200,000 ounces of gold, making it the largest project by output in the country, said the person. Most of the Isabella-McCays-Bubi operations are currently mothballed as the owners search for investors, the person said.
Growth Plans
Caledonia, which has Cape Town-based fund manager Allan Gray as its biggest shareholder, would be able to return the mines to full production within a short period, said the person. They could be operated for more than a decade and would align with the company’s plans to grow its Zimbabwean presence. Raising financing for the deal depends on the nature of the final agreement, the person said.
The gold miner is ramping up production at its Blanket mine in the southwest of the country, and needs larger assets to expand. It sees potential in some mines which were shut down in the 1980s due to a lack of capital, Maurice Mason, the company’s vice president for corporate development said earlier this month.
Caledonia could increase its output more than eightfold through deals, to half a million ounces a year as the company considers investing $400 million in Zimbabwe over the next decade, the person said. This month, Caledonia CEO Steve Curtis signed a memorandum of understanding with the government to evaluate some of the gold assets of state-owned Zimbabwe Mining Development Corp., pending possible purchases.
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