We are initiating coverage on Pantoro (PNR) with a SPEC BUY rating and set a A$0.15 price target. PNR’s core asset is Norseman, which is currently producing ~80kozpa. Production at Norseman commenced in October 2022, however the ramp up to date has been below expectations, with FY24 output falling short of guidance. The development of the Scotia underground is the key growth driver for PNR, lifting production towards its FY25 guidance range of 90-100koz. Our forecasts for FY25 are set at the bottom of the range given the track record to date, noting that a faster ramp up at Scotia presents upside to our base case. Delivering into FY25 guidance ranges presents a key catalyst for PNR in FY25, which if achieved could see a significant re-rating with increased value likely to be ascribed to the 4.7moz resource base.
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