Acacia Mining's valuation still not stretched, says Jefferies

Jefferies reiterated its 'buy' rating and status as the investment bank's top pick in the sector, and lifted its target price to 575p from 550p as the once-chronic underperformer continues to deliver operational and financial improvements under new management.

2017 guidance for higher production and lower costs was "robust", analysts felt, and despite the strong recent run in the shares, the valuation is "not stretched", with its enterprise value 4.9 times EBITDA versus the sector's 7.9x.

Before the end of the first quarter analysts expect the release of an updated resource model for the Gokona underground project at North Mara.

"Additional drilling undertaken is expected to increase ounces and improve confidence in grade, all in support of a mine plan showing >300koz per annum production in excess of 10 years."