Released today by Paragon Funds Management
Key points: discount vs peers (30-50%), FY26 free cash flow $80M free cash flow yield >35%, possible 50% production growth conservative as two underground mines ramp up - no hedging, no debt
Portfolio Insights: Meeka is on the cusp Meeka has been a strong performer for the Fund, advancing its brownfield-turnaround Murchison gold project in WA. Development works are on budget and schedule and first production is expected mid-2025. Ore sources are well established and will see a combination of both high-grade open pit and underground operations over an already solid life-of-mine. Capital intensity is modest and fully funded with the company free cashflowing from 3Q25. Meeka is debt and gold-hedging free. A$gold is breaking records at >A$4,500/oz, providing scope for >100% cash margins. The first full year’s production target of ~45koz appears conservative. Paragon believes it can grow by 50% as the two underground mines ramp up. At spot A$gold, Meeka should generate strong free cashflows (FCF) of $80m+ p.a. from FY26F. Despite the stock more than doubling on the Fund’s initial cost base, it is still attractively priced at ~3x EV/FY26F FCF, at one third to a half its peers. FCF yields are staggering at >35%. The well-aligned management team have done it all before. Paragon expects the stock to perform very well.
