Berenberg starts Meridian Mining at 'buy'

Analysts at Berenberg initiated coverage of Meridian Mining with a 'buy' rating and a 168p price target, saying the recently listed group offers strong upside as it develops the Cabaçal gold‑copper‑silver project in Brazil.

Berenberg, which sees around 89% potential upside from current levels, said Meridian was taking a low‑risk approach to bringing Cabaçal back into production, shifting the historic underground mine to a shallow open‑pit operation with permitting already well advanced. The initial 2.5mtpa plant, rising to 4.5mtpa from year four, gives early access to high‑grade ore and supports what Berenberg called "compelling" economics.

Over the first five years, Berenberg expects annual output of roughly 18kt copper, 92koz gold and 153koz silver, with life‑of‑mine averages only slightly lower. Low upfront capex of around $273m and a life‑of‑mine underlying earnings margin of about 67% underpin a net present value of $1bn, a 95% IRR and a payback of roughly one year.

Berenberg added that exploration offers further upside, with a recent resource upgrade pointing to at least four more years of mine life and significant potential across the wider Cabaçal belt. It also highlighted earlier‑stage prospects at the Jaurú and Araputanga belts, which could host similar mineralisation.

The German bank also pointed to a series of catalysts over the next two years as the project moves through the so‑called Lassonde Curve, including a definitive feasibility study in late 2026, early works in 2026–27, a final investment decision and funding in early 2027, construction later that year and first production targeted for the fourth quarter of 2028. Berenberg expects these milestones to drive the shares closer to 1x net asset value, from around 0.53x today.

Reporting by Iain Gilbert at Sharecast.com