According to Raymond James:
Target Price (6-12 mos): C$4.75
Moving Ahead, But Still Waiting For Key Permit At Platreef
Ivanplats Limited (“Ivanplats”) provided a 1Q13 development update and financial results before market open on Wednesday, Mar-15-13.
We continue to believe that Ivanplats holds stakes in three world-class projects and see potential for substantial long-term value creation. Over the coming years, IVP’s experienced management team and Board will take the company on a long de-risking path, filled with numerous development and financing milestones that, once reached, should lead to a boost in market confidence and a significant appreciation in the company’s valuation. See our initiation report dated Apr-24-13 and titled “Top Class Assets, But a Long Road Ahead”, p. $2.97.
Kamoa – PEA likely delayed until 2H13, which should allow IVP to incorporate results of the ongoing commercial and engineering studies for the upgrading for the Koni and Mwadingusha hydroelectric power stations.
Platreef – A Bulk Sample permit (expected in 2Q13) remains a critical path item, which is necessary for the company to commence development of an exploration shaft. Mining Right application remains on track for 2Q13 submission, while PEA is expected in 3Q13 and PFS in 1Q14.
Kipushi – Pump issues slowed the pace of dewatering during the quarter, although pumping capacity has since been increased. The company expects to make up for the lost time over the next quarter. We await an updated, NI43-101 compliant resource in 2H14, and continue to forecast first prod’n in 2017.
Ivanplats finished the quarter with cash and short-term deposits balance of $297 mln (in-line with our estimate of $296 mln).
We estimate a fully-financed NAVPS of $6.02 implying a current P/NAV of 0.40x, which is a discount to the producers’ average of 0.59x. Our target price is based on 0.60x our 8% minesite NAV estimate (versus peers at 0.21x), before adjusting for other corporate items. These multiples reflect our view of the relative risk of Ivanplats’ operations, balance sheet, size, and liquidity