This report is an updated version of the report published on 5 May 2026 at 2:56 PM AEST.

Company Overview:

Capricorn Metals Limited (ASX: CMM) is an Australian gold exploration and production company focused on the Karlawinda Gold Project in Western Australia. The company operates the Karlawinda Expansion Project (KEP) to increase production capacity and develop infrastructure. CMM also explores and develops additional gold projects.

Recommendation Rationale – AUD 12.920

• Surpassed Resistance: CMM share price has surpassed the R1 level recommended on 21 March 2026; hence, the stock could face some resistance in the near term.
• Overvalued Multiples: On a forward 12-month basis – key trading multiples (EV/EBITDA, Price/Cash Flow, Price/Book, and Price/Earnings) are higher or overvalued than average of the Basic Materials’ sector.
• Costs Tracking at Upper End of Guidance: CMM is already operating at an AISC of AU$1,617/oz in Q3 FY26 and AU$1,623/oz YTD FY26, which is at the top end of FY26 guidance (AU$1,530–AU$1,630/oz). This leaves no buffer for cost overruns, especially with expansion and inflationary pressures still in play. Any adverse movement in input costs (fuel, labour) can push margins down quickly.
• Heavy Capex Phase Can Reduce Free Cash Flow Visibility: CMM is currently in an intensive investment phase, with ~AU$50 million of capital expenditure deployed in Q3 alone, largely directed towards the Karlawinda Expansion Project (KEP) and early-stage development at Mt Gibson. While operating cash flows remain robust, this elevated and sustained capex profile is absorbing a significant portion of internally generated cash, limiting near-term free cash flow generation.

Daily Price Charts

Daily Technical Chart, Data Source: REFINITV

Valuation Methodology: Price/Cash Flow Approach (FY Jun'27E) (Illustrative)

Stock might trade at a slight premium to its peers, considering the record operating cash flow of ~AU$143 million in Q3 FY26, operational consistency, and production visibility with Karlawinda Expansion Project. For conducting valuation, following peers have been considered - Greatland Resources Ltd (ASX: GGP), Predictive Discovery Ltd (ASX: PDI), and PLS Group Ltd (ASX: PLS).

Given the stock has surpassed its R2 level, recent rally in the share price, and risks associated, it is prudent to sell the stock at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 12.920, at 2:35 PM AEST, as of 5 May 2026.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 5 May 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Note 5: Dividend Yield may vary as per the stock price movement.  

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.