Lumina Copper Corp. (LCC-V C$8.76)
Update and Private Placement
¦ Before market open on Oct. 9, LCC released an update on its strategic review and announced a C$23.75M non-brokered private placement.
¦ Resources update expected end of November. The company has completed 129,000 metres of exploration drilling at its Taca Taca project located in Salta Province, Argentina. A new NI 43-101 compliant resource estimate is expected for the end of November and will include 65,000 metres of new drilling since the last resource update in May 2012. Final assays are expected late October.
¦ PEA expected Q1/13E. A preliminary economic assessment (PEA) based on the updated resource is expected for Q1/13. In our opinion, a PEA would be an effective negotiating tool with prospective companies. Lumina mentioned that it is still conducting transaction discussions with several major mining companies.
¦ C$23.75 million financing. Lumina will issue 2.5 million shares at C$9.50. Proceeds will be use for the PEA (with an estimated cost of C$2.6 million) and to repay the US$13 million loan from Lumina Capital Limited Partnership.
¦ We reiterate our 1-SO rating. As a result of the increased share count, our NAVPS decreased to C$28.54 from C$29.90 and our 1-year target price is down to C$20.00 from C$21.00. The company trades at a P/NAV of 0.33x vs the adjusted peer group at 0.23x (excluding TRQ).
Tom Meyer, P.Eng., CFA - (416) 945-4526 (Scotia Capital Inc. - Canada)