In addition, CNMC is boosting production by opening a second underground mining facility and will be constructing two new additional vertical underground mining infrastructure facilities at its Sokor mine in Kelantan, Malaysia. Total estimated cost is US$12 ($15.5) million and will provide open access to deeper higher-grade ores and enhance overall production quality once fully operational in 2027.
That said, he sounded some caution with potential delays to the second underground facility due to water accumulation issues at the supporting shaft of the underground mining project. He also notes that actual gold production is dependent on the ore grade which may fluctuate from period to period.
Beyond the mining facilities, a comparative advantage for mining companies such as CNMC is their operating leverage due to their relatively fixed cost base. With all-in costs of around US$1,500 per ounce of gold, these costs are “safely” below current gold prices of more than US$4,000. This means that CNMC is positioned to benefit more when gold prices rise, with the converse also true that it earns less when gold prices drop.
Another potential headwind for CNMC are regulatory issues, with Chan pointing out that tax penalties and higher royalty rates potentially casting uncertainty over the counter. CNMC announced in December 2025 that it received a notice of additional assessment of US$7.2 million from the Inland Revenue Board of Malaysia for the period of FY2019-2024. The company strongly disagrees with the tax liability and intends to file an appeal and challenge the additional tax assessments.
The Kelantan State Land and Mines Office has also issued a circular stating that the royalty rate payable on minerals produced in the Kelantan are to be increased from January 2026. The royalty rate payable for gold was revised to 15% from 10% previously, and the royalty rate payable for silver was revised to 12% from 10% previously. CNMC notes that it has not been served with an official published gazette and intends to submit an appeal against the proposed increases in the royalty rate payable.
Lim and Tan expects CNMC to post “strong” results for 1HFY2026, supported by average gold prices of US$4,680 per ounce since the start of the year. The $1.90 target is based on valuations blending a peer average 9.5 times FY2026 P/E and discounted cash-flow with weighted average cost of capital of 12% and terminal growth of 0%. Backed by a net cash of US$62.6 million, or 17% of market cap, Lim and Tan projects earnings to grow by 31% and 8% respectively for FY2026 and FY2027, translating into a 5.1% forward dividend yield based on a 34% payout ratio.
As at 3:55 pm on July 10, CNMC is trading at $1.22, an increase of five cents or 4.2% higher than the previous closing price.
