Canaccord Genuity mining analyst Nicholas Campbell has increased his target price on Fortuna Silver Mines Inc.
, Stock Forum
) (NYSE: FSM
, Stock Forum
) as results continue to demonstrate the significant potential of the Trinidad North discovery at the San Joes mine in Mexico, Canaccord said Monday it its Morning Coffee report.
The new target is $4.75, up from $4.50.
Highlights from 12 recently completed drill holes include 4 metres, grading 850 grams per tonne silver, and 4.48 grams per tonne gold in Hole SJO-321. Hole SJO-304 intercepted 8.2 metres, grading 487 grams per tonne silver and 4.0 grams gold.
To date, the grade intercepted at Trinidad North has ranged from 200 to 2,300 grams grams per tonne silver equivalent, with widths ranging from 2 to 19 metres.
Fortuna is currently developing underground workings at level 1300 and expects to be in a position to drill the Trinidad North extension from an underground drilling station by early September 2013.
Fortuna continues to guide for a start of production from the high grade zone in early 2015, which Campbell believes could increase the annual production from San Jose to 6.5-8 million ounces-plus of silver equivalent per year, up from 4.8-5.2 million currently.
Fortuna shares were trading at $4.51 Monday, leaving the company with a market cap of $565.1 million, based on 125.3 million shares outstanding. The 52-week range is $5.85 and $2.65.