Bell Potter just put a buy rating on this ASX 200 gold stock

Golden returns could be on the cards for buyers of this stock.

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With the gold price booming, now could be a great time to have exposure to the precious metal.

But with many ASX 200 gold stocks up strongly this year, are there any that are still good value?

Bell Potter thinks there is one in particular that could generate big returns.

Which ASX 200 gold stock?

This morning, the broker has slapped a buy rating on Genesis Minerals Ltd (ASX: GMD) shares.

It is a Western Australian gold production and development company focused on the Leonora District.

It owns two gold processing plants (Leonora and Laverton), 15 million ounces of contained gold in mineral resources, and 3.3 million ounces in ore reserves, across four mining centres.

Bell Potter notes that the ASX 200 gold stock recently released its long-term guidance. It was pleased with what was announced. The broker said:

GMD has released long-term guidance detailing its plans to grow production from 135koz in FY24 to 325koz by FY29, with a declining All-in-Sustaining cost profile (FY25: ~ AU$2,300/oz, FY29: AU$1,600/oz). Beyond FY29, GMD has indicated up to 350kozpa of production, with an ambition to reach 400kozpa and beyond. Relative to peers, GMD's planned production growth rate is high.

Time to buy

According to the note, Bell Potter has put a buy rating and $2.55 price target on the ASX 200 gold stock.

Based on its current share price of $2.10, this implies potential upside of 21.5% for investors over the next 12 months.

Commenting on its buy rating, the broker said:

We initiate coverage with a BUY recommendation in accordance with our recommendation structure. In addition to the planned long-term growth, GMD guides near term growth with FY25 production guidance of 190koz to 210koz of production, a ~50% increase on 135koz in FY24, and the restart of processing at the Laverton plant in December 2024.

Bell Potter highlights that the company has a strong management team with lots of mergers and acquisitions (M&A) experience. So much so, it wouldn't be surprised if there was further M&A activity in the future. It concludes:

Management is highly experienced, well known and respected, having previously grown Saracen Minerals to a $6b gold company before its merger to Northern Star Resources Ltd (NST, Buy, TP$17.50ps). Following a period of M&A activity, GMD has signalled its now focused on execution of the long-term production growth plan, and organic growth within the current portfolio of assets. The combination of growing production, declining costs and a supportive gold price, will progressively enhance GMD as a growth platform. And few would be surprised if GMD engaged in further M&A to take the business to even greater production levels.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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