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Cannacord upgrade BUY RUSORO MINING LTD.RML : TSX-V : C$0.45 | C$204.00M Buy, C$1.00$0Venezuelan promise -- BUY, target price C$1.00$0$0Jim Taylor, 44.20.7050.6648 Targeting substantial production increase and cost decrease in 2009 $0Higher grades at Choco 10 and a full year's production at Isidora (50%) are planned to lift attributable production from 95koz last year to 157koz this year. Costs are planned to fall from US$649/oz to US$407/oz as a result of increased production and depreciation of the local currencyRecent studies point to potential for rate of 560koz from Choco by end 2012 $0A positive Preliminary Assessment of increasing production at Choco 10 to 560koz pa by late 2012 was completed in May. Indicated capex was US$239 million and total cash costs were US$331/oz. A Feasibility Study is planned to be completed by mid-2010.Attractive projects but low rating presents opportunity $0Perceptions of political risks in Venezuela have overshadowed the attractions of the company's projects, leading to a low rating. However, the company has operated successfully in the country and continues to act as a consolidator.We are transferring coverage of Rusoro Mining following a reallocation of analyst resources. We are re-instating a BUY recommendation and setting a target price of C$1.00 per share (previously Under Review). We base our target price on a P/NAV multiple of 0.4 assuming our peak gold price scenario of US$1,100/oz and a discount rate of 5%. The stock is currently trading at a P/NAV of 0.26 times assuming the spot gold price and a 5% discount rate.Main risks relate to Venezuelan gold sales policy and project delivery Venezuela operates exchange controls and a gold sales policy that result in the company receiving a discount of around 20% of the spot gold price. The company is seeking clarification on recent proposed changes to the law. We also note that our valuation assumes the commencement of the expanded production at Choco 10 from the beginning of 2013.$0 |
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| aus der Diskussion: | RUSORO MINING |
| Autor (Datum des Eintrages): | XIO (06.07.09 20:55:54) |
| Beitrag: | 52 von 250 (ID:37526830) |
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