PNR’s 2QFY25 result was weaker than we had expected, with gold production and sales 6-10% below our forecasts, although we note that production was within the guidance range for the quarter. AISC were also higher than we had expected, however a higher bullion balance and favourable working capital movements results in cash and bullion of A$119.3m being in line with our estimate. PNR has downgraded its FY25 production guidance range by 5-6% due to a slower ramp up at Scotia, however we have made only minor adjustments to our forecasts, which was at the bottom end of the previous range. AISC guidance for FY25 has been increased by ~16%, with our FY25 AISC estimate already broadly in line with the updated guidance range. Adjustments to our forecasts and ramp up profile for Scotia translate to 4-5% upgrades to our FY25 and FY26 earnings forecasts, and combined with the rise in spot gold prices drives a 13% lift in our price target to A$0.17 and we reiterate our SPEC BUY rating.
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