Metals Exploration PLC (LSE: MTL)

Metals Exploration PLC (LSE: MTL) is an FTSE AIM 100 Index listed, UK-based gold producer engaged in identifying, acquiring, exploring, and developing mining and processing projects, with a primary focus on precious and base metals in the Philippines. The company operates the Runruno gold and molybdenum mine, located around 250 kilometers north of Manila in the mineral-rich Nueva Viscaya province. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

Key Recommendation Rationale – Sell at GBX 14.20

• Resistance near Current levels: MTL’ stock price has breached Resistance (R2) which was stated in the previous report on 20 November 2025 therefore, there can be a possibility of a decline from resistance levels. Considering the market conditions and the price action, it is prudent to exit the stock.
• Significant Decline in Gold Sales and Production - Metals Exploration experienced a major decline in both gold sales and production in Q3 2025 compared to the previous quarter. Gold sales dropped to $25.5 million, down from $70.5 million in Q2 2025, reflecting a sharp reduction in the amount of gold sold (8,833 oz vs. 23,021 oz). This decrease was largely due to the cyanide contamination of the gold processing circuit at the Runruno mine, which led to a six-week processing halt and a substantial reduction in gold production. As a result, gold production in Q3 2025 plummeted to 9,145 oz from 19,993 oz in Q2 2025. The disruption to processing operations resulted in lower-than-forecast ore grades and a drop in recovery rates, leading to higher all-in-sustaining costs (AISC) of $1,923 per ounce, up significantly from $1,098 per ounce in Q2 2025.
• Higher Costs and Delayed Mining Schedule - The contamination issue at Runruno not only caused a significant dip in production but also led to increased operational costs. The all-in-sustaining cost (AISC) per ounce surged to $1,923 in Q3 2025, up from $1,098 in the previous quarter, largely driven by the lower recovery rate and halted processing activities. Additionally, the mining schedule had to be adjusted following the cyanide contamination, resulting in reduced ore mined (404 Kt in Q3 2025 vs. 525 Kt in Q2 2025). The overall mining production for the quarter also fell short of management’s forecasts, with only 1.99 million tonnes mined compared to 2.98 million tonnes in Q2 2025, which is expected to affect the annual production guidance for FY2025, now anticipated to be at the lower end of the original forecast range.

Valuation Methodology: Price/ Earnings Approach

Share Price Chart  

 MTL Daily Technical Chart, Source - Refinitiv

Conclusion

MTL is expected to trade at a discount, considering Higher Costs and Delayed Mining Schedule and fears of global slowdown. For conducting the valuation, the following peers have been considered - Griffin Mining Ltd (LSE: GFM), Anglo Asian Mining PLC (LSE: AAZ) and others.

Given its current trading levels, Significant Decline in Gold Sales and Production, recent rally in the share price, relative valuation, and associated risks, it is prudent to exit the stock at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the Current Market Price of GBX 14.20 as of 02 December 2025 at 09:55 AM GMT.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 02 December 2025. 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: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and/or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 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 6: Dividend Yield may vary as per the stock price movement.