BGL’s five-year growth plan was weaker than we had expected. While the production rate and AISC forecasts for the end of the five-year period were in line with our estimates, the production forecasts for FY25-FY27 were 5-16% lower than we had expected, while AISC were 1-9% higher than our base case. The capital cost to deliver the expansion of A$320m was four times higher than we had anticipated. To fund the expansion and repay ~55% of its debt, BGL launched a A$150m capital raising and A$25m SPP, which was not factored into our forecasts. We have adjusted our production, cost, and capex forecasts to match the five-year outlook, with production towards the bottom end of the ranges and AISC at or above the upper end of guidance. The changes to our operational outlook and incorporating the capital raising drives 34-61% cuts to our EPS forecasts and we lower our price target 26% to A$1.40 and reiterate our HOLD rating on BGL.
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