Our visits with a BRMS director to several fund managers reveal high investor interest on the company’s expansion of additional 4,000 tpd in development, and underground mining planned for 2027 in Citra Palu Mineral (CPM). Another growth driver for BRMS, second largest gold reserves among listed companies in Indonesia, is the involvement of AP Investment / Salim Group which we expect to drive 2024-2028F CAGR of 22.0% at the EBITDA level and 19.2% for EPS. That said, we reiterate our positive view on BRMS with TP of IDR 500 (SOTP-based), reflecting USD 26.6 EV/reserve and 35.9% upside potential. BUY.

Unlocking 75% Higher Grades and Near-Doubling in Capacity to Drive Growth. CPM, in Central Sulawesi, is the crown jewel of BRMS’s operations, boasting 31.5 Mt of reserves and 40.2 Mt of resources with average ore grade of 3.5 g/t. BRMS currently operates two production plants with combined ore processing capacity of 4,500 tpd, and in 4Q24, the company plans to operate its third plant, a heap leach facility, adding another 4,000 tpd of capacity. To further boost gold production, BRMS is set to commence underground mining in Block-1 Poboya, targeting higher ore grade of 4.9 g/t. These initiatives will drive the company’s 2027F dore bullion production to 145.4 koz, up 165.6% from current output.

Upside from Four Untapped Gold & Copper Assets with 4x the Current Reserves. Aside from CPM, which only has one out of five potential blocks being operational, the company holds significant assets: Banten (18.4 Mt) in Java, Aceh (2.3 Mt) in Sumatra, and Gorontalo (105.4 Mt) in Sulawesi for combined reserves of 126.1 Mt, four times larger than CPM’s. Management plans to commercialize Gorontalo Minerals, a copper and gold mine, by 2026F, processing 2,000 tpd with copper and gold grades of 0.49% and 0.43 g/t, respectively. We believe the monetization initiative, along with CPM’s underground mining, will boost BRMS’s 2028F EBITDA to USD 107 million (+56.3% YoY) and net profit to USD 129 million (+21.0% YoY).

2025F Revenue & EBITDA Growth of +50%; BUY with Higher TP of IDR 500. Supported by strong 2024F dore bullion production of 54.7 koz (+135.3% YoY) with further growth expected to 78 koz (+42.5% YoY) in 2025, and elevated gold prices at USD 2,600/oz, BRMS is set to achieve 2025F revenue of USD 207 million (+57.5% YoY) and EBITDA of USD 75 million (+70.6% YoY). We reiterate our BUY recommendation on BRMS with new target price from IDR 230 to IDR 500 (SOTP-based), reflecting USD 26.6/ton EV/reserve and 35.9% upside potential. Further upside remains as our target price has not yet factored in the commercialization of BRMS’s other assets nor additional byproduct sales. Near-term catalysts include JORC-standard reserve announcement with higher gold grades and strong 3Q24 results. Downside risk: lower gold prices, operational delays, and financing issues.