IKN notes that The Can of Corn has today upped its target to 80c on Belo Sun (BSX.to) due to the move made by Agnico Eagle (AEM) on the stock last night (difficult not to note it after being sent the analysis four times in the space of an hour). Here’s a chunk of the prose from the PDF that sums it up:
Valuation and RisksIn valuing Belo Sun, we use forward curve pricing and discounted cash flow analysisdiscounted at a project WACC of 8.6%. In our Base Case, on a fully funded basis, we see814M shares outstanding, generating a project NAVPS of $0.31 and a corporate NAVPSof $0.76. Applying a 1.0x P/NAV multiple generates a target NAVPS of $0.76 supportinga rounded target price of C$0.80, increased from $0.70. The 264% projected return
continues to support a SPECULATIVE BUY rating. We highlight Belo Sun’s reliance oncapital markets and the ability to permit Volta Grande as key risks to our valuation andtarget.
We therefore note just how good this house is on BSX by pointing you in the direction of Canaccord’s previous coverage on this stock. Let’s just say that their recommendations have been less than optimum so far.