Stifel Canada on Thursday maintained its buy rating on the shares of Arizona Metals (AMC.TO) while cutting its price target to C$2.50 from C$6.00 after the company released a weaker than expected mineral-resource estimate (MRE) for its Kay project.
"Headline maiden MRE for Kay has come in at a skinny 10.1MMt @ 3.1% CuEq for just shy of 700MMlbs CuEq; 93% of tonnage is in the indicated category. This number is well shy of street estimates (~15-20MMt) and will come likely as a disappointment to investors given the +4 years & 133km drilled on the project post the historic, non NI 43-101 6MMt @ 5-6% CuEq Exxon resource. That said, post reset, we think stock is approaching the 'too cheap to ignore territory' ($0.12/lb CuEq, ie comps VMS asset in situ + no value for Sugarloaf); and would intimate post reset, we see a dual track derisk (PEA + further met work by year end) + drill (with only 7% inferred, much of the forward drill budget can go towards exploration) thesis, while firmly in the 'show me camp'. We are revising our target down to C$2.50/sh," analyst Cole McGill 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)
Price: 0.97, Change: -0.02, Percent Change: -2.02
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