Stifel Canada on Wednesday maintained its hold rating on the shares of First Quantum Minerals (FM.TO) while raising its price target to C$26.00 from C$25.00 after the company reached US$1 billion streaming agreement for gold from its Kansanshi mine in Zambia.

"First Quantum announced a US$1.0Bln Kansanshi gold streaming agreement with Royal Gold to be paid in cash with proceeds to be used for capex, general working capital and loan repayments while FM monitors debt capital markets to manage its maturities. Under the terms, FM will deliver 75 ounces of gold per 1Mln pounds of recovered copper produced until 425Koz, 55 ounces of gold per 1Mln pounds of recovered copper produced until an additional 225Koz are delivered; and 45 ounces of gold per 1Mln pounds of recovered copper produced thereafter. Post-transaction, we estimate FM shares are pricing in 50% of Cobre Panama option value: This is a level we currently view as fair when considering potential restart and shared ownership/partnership scenarios, copper prices, and balance sheet scenarios, which assumes FM shares should trade at 0.80x P/NAV (excluding Cobre Panama) and 1.0x (including Cobre Panama) based on spot LME copper prices," analyst Ralph Profiti wrote.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)