Report
Dr. Michael Green

Caracal Gold - Initiation of Coverage

Caracal Gold is the old Papillon Holdings which joined the LSE in 2016 as a shell. After a couple of false dawns, the Kilimapesa Gold Mine in Kenya has been reversed into it together with a highly experienced management team equipped with the necessary funds to recommence production and really get things moving. Caracal was readmitted to the LSE in August 2021 with big plans to rapidly increase gold production and build a substantial JORC compliant resource base in short order by taking advantage of later stage opportunities in gold projects across Kenya, Tanzania and Uganda.

  • Bold ambitions of 50,000oz pa production and +3Moz MRE by year-end

    Gold production has risen swiftly at Kilimapesa since the reopening to 1,000oz per month. Well-defined development plans are in place to optimise operations to significantly increase production, while rapidly building up the resource base to create a reasonably sized long life mine with good margins.

  • New acquisitions Nyakafuru & Simba snapped up in Shanta’s backyard

    Caracal looks like it caught Shanta Gold napping in acquiring two cracking gold projects in Tanzania. These add JORC resources of 1Moz to the company’s existing 671,400ozs. These are advanced projects in proven gold districts which are planned to be developed as conventional open pit mining operations.

  • Enviable pipeline of acquisition opportunities to be actioned in 2022

    The acquisition pipeline includes one project that is close to production coming with a recently finalised BFS. Plus there is also a Kilimapesa look alike which is already in production. As before, vendors seem more than happy to take paper as they appreciate that the Caracal team is successfully & rapidly adding value.

  • Peer group & DCF analysis suggest +125% potential on a fully diluted basis

    Our highly conservative valuation shows the potential. We initiate coverage of Caracal Gold with a target price of 2.73p and Conviction Buy stance.

Underlying
CARACAL GOLD PLC

Provider
Align Research
Align Research

Align Research is a commissioned research company founded in November 2015 in order to provide the under-served smaller company space with high quality analysis. We have an initial focus on the natural resources sector, in which we see significant opportunities given the current once in a generation bear market, however all undervalued small caps (sub £100m) are considered by our team. Align was founded by industry professionals with decades of experience in the stock markets, headed up by highly qualified individuals from both fund management and analytical backgrounds.

Analysts
Dr. Michael Green

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