Take physic, pomp

Ventana Gold (VEN.to) upped to spec buy at TD Sec

Wanna know what Daniel Earle thinks about today’s Ventana Gold (VEN.to) news? Click this link and download your own copy of his analysis, but here’s the headline blurb that comes with it.

Ventana released the much anticipated results of the Scoping Study and resource estimate for its wholly-owned La Bodega gold project in northern Colombia this morning.

Scoping Study highlights:
-Initial inferred resource of 3.5mm oz Au (range of 3mm oz to 6.7mm oz depending on cut-off selected), 19mm oz Ag, 85mm lbs Cu
-Start-up capital costs of US$297mm (incremental US$169mm over LOM)
-14 year mine life with planned production at 7500 tpd
-Average production of 301,000 oz/yr Au at net cash costs of US$322/oz over first 6 years
-Reported pre-tax NAV5% of US$807mm with IRR of 34% at metal prices of US$1000/oz Au , US $17/oz Ag, and US$3.00/lb Cu
It is difficult to gauge Street expectations as the company has a limited following. However, the figures presented above taken together are broadly inline with our expectations, with the project being smaller at this time but also more profitable than we had anticipated.
We believe this sets a baseline upon which the company can expand and improve the project. Moreover, we believe this milestone may mark the emergence of the company from a long period of underperformance typical of companies during the feasibility stage of their life cycle.

As such, we are upgrading the stock to Speculative BUY (from Hold) and increasing our Target Price to $16/share (from $14).

IKN back. Earle was early and good on the VEN story in ’09 but just recently has been fiddling around with his call and got a bit too cute for his own good by downgrading to hold just a couple of weeks ago. Nice to see he’s back with the right call on VEN now. DYODD, dude.

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