Analysts at Noble Capital Markets recently reiterated their buy recommendation for Nicola Mining (TSX.V: NIM, FSE: HLI, WKN: A14T7S). They see the company at the beginning of a compelling growth story and therefore confirm their “Outperform” rating. Noble Capital Markets states the fair price for Nicola Mining at US$0.75 or C$1.05 (Canadian Dollars).
The confirmed buy recommendation is supported by the strong financial results for the second quarter. In it, Nicola Mining reported a net profit of C$1,181,286 or C$0.01 per share, compared to a net loss of C$2,519,885 or (C$0.02) per share in the second quarter of 2024. The company thus clearly exceeded analysts’ expectations, as they had projected a net loss of C$1,077,068 or -C$0.01 per share.
The deviation from the original estimate is largely due to a valuation gain from marketable securities. For the current year, Noble Capital Markets has raised its estimate for net profit and earnings per share from C$7,582,855 and C$0.04 to C$11,004,631 and C$0.06 per share, respectively. In doing so, the analysts based their estimates on actual commodity prices in July and August.
Nicola Mining to Soon Have Stable Cash Flow
A strong point for Nicola Mining is that the Merritt Mill is currently ramping up its production. With a capacity of 200 tonnes per day, Nicola’s Merritt Mill is on track for full commercial production and continuous generation of additional cash flows. The company expects the mill’s capacity to be 100 percent utilized by the end of the third quarter.
In early July, the Merritt Mill began processing gold ore from Talisker Resources’ Bralorne Project. In addition to processing ore for Talisker, ore from Blue Lagoon’s Dome Mountain Gold Mine and the Dominion Creek Gold Project, in which Nicola holds a 75 percent economic interest, is also expected to be processed in the third quarter.
Approximately 100% Upside Potential
The investment recommendation is “Outperform”. “The increase in Merritt Mill’s capacity in the third quarter represents a turning point for the company, as its revenues and cash flow are expected to increase significantly,” write the analysts at Noble Capital Markets. “We believe Nicola Mining is at the beginning of what we consider a compelling growth story in terms of revenue and cash flow. Our rating remains “Outperform” with a price target of US$0.75 or C$1.05 per share.”
If this assessment is accurate and the stated price target is realistic, investors in Nicola Mining can look forward to an upside potential of approximately 100 percent.
