The capital market firm’s strategy team has “materially upgraded” its gold forecasts over the next three financial years to US$2700, $2775 and $2600 per ounce, respectively.
“Record-high US$ and A$ gold prices, good balance sheets but aging asset bases, and a general lack of exploration success indicate there may be more potential M&A ahead as companies look to replenish pipelines and inventory and recycle projects,” UBS said.
The UBS equities team has upgraded its market calls on ASX-listed stocks like Genesis, Northern Star, Regis Resources and SSR Mining while remaining positive on already established ‘buys’ such as Bellevue, De Grey, Evolution and Gold Road.
Of the companies listed above by UBS, De Grey and Bellevue stand as notionally the most obvious targets, with the latter having a new mine up and running and the former a potential multi-decade operation still to be built.
Meanwhile, UBS cautions operational ‘misses’ could be ahead, but they will be more than covered-for by the price of the precious metal.
“We have previously flagged some moderate risks around FY25 guidance and medium-term cost profiles and have taken the opportunity to update this, but this pales in comparison to the prospect of nearly A$4000/oz gold,” UBS said.
“The sector continues to look relatively attractive and we see NPVs (rising) plus-10-28% and earnings up to 104% higher.”
