PNR reported positive earnings and cash flow in the 1HFY25 for the first time since production at Norseman commenced. Earnings were below our estimate due to a higher depreciation expense, while cash earnings were in line. Improved output and a stronger gold price should see PNR’s earnings and cash flow surge to new records in the 2HFY25. The ramp up of the Scotia underground is the key driver to the stronger production outlook. Initial drilling results at Polar Bear have returned some encouraging results at the Hinemoa Fault and could provide longer-term ore feed. We reiterate our SPEC BUY and A$0.17 price target on PNR.
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