BGL’s 1QFY25 result was mixed with production coming in 12% lower than we had forecast. Gold sales were higher than production and combined with positive variances on capex and working capital, enabled BGL to report cash generation broadly in line with our estimates. Importantly, guidance ranges remain unchanged, with BGL expecting to see increased production rates in the 2HFY25 due to improved average grades mined. Exploration drilling has recommenced and the delineation of additional high-grade zones within Deacon Main suggest that grade overcall vs reserves is possible. We are reiterating our BUY rating on BGL and lift our price target 9% to A$1.75 due to the rising gold price.
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