BMO Capital maintained its Outperform rating and C$35.00 price target for Lundin Gold (OTC:) Inc. (LUG:CN) (OTC: FTMNF), following the company’s third-quarter gold production report. Lundin Gold produced 122,000 ounces of gold in the quarter, aligning closely with the anticipated figures of 125,000 ounces by consensus and 124,000 ounces by BMO Capital’s own estimates.
The production results came despite lower than expected recoveries and ore processing rates. The company reported gold recoveries at 87%, slightly below BMO Capital’s estimate of 89%, and processed ore at a rate of 4,600 tonnes per day, which was less than the expected 5,000 tonnes per day.
However, these shortfalls were counterbalanced by higher-than-anticipated gold grades, which averaged 10.3 grams per tonne, surpassing BMO Capital’s estimate of 9.8 grams per tonne. This performance indicates that Lundin Gold has compensated for the lower processing rates with richer ore.
BMO Capital expressed confidence in Lundin Gold’s ability to meet or even exceed the mid-point of its annual production guidance, which ranges between 450,000 to 500,000 ounces of gold. The firm’s analysis suggests that the company is well-positioned to achieve these targets.
Lundin Gold’s steady production and the potential to meet its yearly goals have reinforced BMO Capital’s positive outlook on the stock, as reflected in the reaffirmed Outperform rating and C$35.00 price target.
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