MAC delivered a strong 2QCY24 result with copper production of 10.9kt and AISC of US$2.62/lb 14% higher and 10% lower than our estimates, respectively. The beat in production and costs was largely driven by higher average grades mined. Cash generation was solid with free cash flow generation of US$21m. MAC has kept its CY24 guidance ranges unchanged, and we have upgraded our CY24 production forecast by 3% and lower AISC estimate by 6% to reflect the stronger 2QCY24 result. However, we have cut our price target by 18% to A$22.50 due to a material decline in spot copper prices since our last update in late May. MAC offers significant leverage to copper prices, with a 10% change in the spot copper price driving 40-60% moves in our earnings forecasts and a 20% change in our valuation. We reiterate our BUY rating.
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