MAC’s 1HCY24 earnings result was mixed with beats in Ebitda and Ebit offset by lower underlying earnings and a large net loss. Copper production from MAC’s CSA Mine in NSW is expected to rise in the 2HCY24, which should deliver improved earnings and cash flow. Increasing ventilation in the deeper parts of the underground underpins further growth in copper production to ~50ktpa over the next two years. We have left our production and AISC forecasts unchanged, with upgrades to our earnings outlook driven by reduced depreciation charges. MAC is expected to start generating strong free cash flow from CY27 post the completion of the ventilation upgrades and ramp up of copper production to ~50ktpa. We are reiterating our BUY rating on MAC, lifting our price target 5% to A$23.00, reflecting the improved earnings outlook and stronger copper price.
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