According to CIBC World Markets:
Belo Sun Mining Corp.
Stock Rating: Sector Outperformer
Sector Weighting: Overweight
12-18 mo. Price Target: $2.75
Confidence Grows With Resource Update
- Belo Sun has provided an updated resource estimate for the Volta Grande project. The update includes improved resource confidence with a 16% increase to measured and indicated (M&I) resources from ~4.1M to ~4.7M oz. Total resources have also increased from ~6.9M to ~7.2M oz.
- Grade has remained consistent with open pit grades now averaging ~1.73g/t for combined North and South Blocks. The North Block open pit grade has decreased <3% to 1.69g/t vs. 1.74g/t previously. We see the consistency of resources in upgrading inferred ounces to M&I as positive.
- We have added a portion of South Block open pit ounces in valuation; South Block ounces were previously excluded from our model. We use 85% and 100% of the in-pit inferred and M&I ounces respectively in our model. Total DCF model ounces now reach ~6.65M oz. vs. ~5.97M oz. previously.
- Incorporating model revisions increases our 8% discounted NAV for BSX to $3.80/share from $3.76/share previously. Based on our estimates BSX is currently trading at 0.2x our 8% NAV calculated at $1,500/oz. and 0.3x our 8% NAV based on spot gold. We believe BSX continues to be undervalued.