Centerra Gold (CGAU) is in a "significant" investment phase as it advances key projects like Thompson Creek, Goldfield and Kemess, but its near-term performance is weighed down by weak production at Mount Milligan and declining output at Oksut, RBC Capital Markets said in a note Tuesday.

Analysts, including Michael Siperco, said that as the company shifts toward greater exposure to copper and molybdenum, reducing its reliance on gold, its near-term upside to higher gold prices is limited, especially given the roughly 30% discount on Mount Milligan's gold output due to a streaming agreement.

They added that despite the company's deep value, investors may prefer gold producers with more immediate production growth and stronger free cash flow potential, especially those more directly leveraged to precious metals.

The analysts also said Centerra's ongoing development projects in Canada and the US are at various stages of progress. The Goldfield project may start production by 2029, while Kemess could follow around 2032, "but rising execution risks and declining gold production until then, despite a strong tape, keep us sidelined."

RBC downgraded Centerra Gold to sector perform from outperform and lifted its price target to CA$14 from CA$13.

The analysts said the new target is supported by the value of Centerra's Mount Milligan, Oksut, and Molybdenum assets as well as its cash position.

Price: 8.77, Change: -0.08, Percent Change: -0.87