More matter with less art

Stopped clocks

Y’see, even Nicholas CampbellSoup can get ’em right occasionally. This from today:

Fortuna Silver Mines Inc.
FVI : TSX : C$7.30 | C$902.5M | Speculative Buy, C$9.50
  • A premier junior silver producer with a proven management team; maintaining SPEC BUY rating; increasing target to C$9.50 (from C$7.25)

Nicholas Campbell, 604.643.XXXX
Investment recommendation We maintain our SPECULATIVE BUY recommendation on the shares of Fortuna Silver with a revised 12-month target price of C$9.50, up from C$7.25.

Investment highlights

  • With the San Jose mine ramping up and the steady contribution of the Caylloma mine, Fortuna appears positioned to continue growing its annual production over the next five years, with peak production estimated at 6.8 million ounces of silver-equivalent by 2017.
  • Fortuna has more than US$70 million in cash in the bank and no debt. We forecast that the company should generate operating cash flows of $80-115 million per year over the next 10 years.
  • We believe Fortuna’s management team has a stellar track record of developing and operating underground mines. In an environment with increasing scarcity of experienced, proven management groups, we believe Fortuna possesses one of the top teams to add value through further exploration and development.

Valuation Our peak silver estimate of NAVPS (5%, US$35/oz Ag) remains unchanged at C$8.54. However, given the proven management team, strong balance sheet, and organic growth profile, we believe Fortuna Silver is a premier junior silver producer that warrants a premium valuation. We are adjusting our valuation to 1.1x our peak silver price estimate of NAVPS (5%, US$35/oz), up from 0.85x previously.

IKN back. That’s really the whole thing apart from a page of numbers, but if you want to see the PDF of the above click right here for your copy.

PS: By the way Soupy, real lack of genuine analysis on your GGA call today. Swallowing the company line wholesale like that will get you into trouble again. Haven’t you learned that from your BAT debacle yet?

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