Dundee Capital Markets
has raised its stock price target for Trevali Mining Corp.
, Stock Forum
), a move that is driven by a preliminary economic assessment, which shows that the company’s Caribou project in New Brunswick could operate as a standalone project.
The new target is $1.80, up from $1.60, said Dundee analyst Joseph Gallucci in a research report.
Trevali is widely viewed among research analysts as a unique Canadian play on the price of zinc.
With production now underway at the Santander mine in Peru and mill construction progressing in New Brunswick at Caribou, Trevali should have two producing operations on line and fully ramped up by the time we expect improving zinc fundamentals buoy prices in 2015, Gallucci said.
The Caribou preliminary economic assessment (PEA) highlights a 3,000 tonne-per-day mining operation at the Caribou site starting in the second quarter of 2015.
The Caribou Mill will now process ore from the Caribou deposit, thereby leaving the nearby Halfmile and Stratmat deposits free to run as a separate 4,000 tonne-per-day operation in the future.
Dundee estimates that Halfmile/Stratmat can be brought on line in 2018 for $125 million by building a mill facility at the brownfield Heath Steele site adjacent to the Stratmat deposit.
“This would give Trevali two mining operations (from three separate deposits); producing over 350 million pounds of zinc per year, in New Brunswick by the end of the decade for a total initial capital expenditure of under $200 million,’’ Gallucci said.
Trevali shares rose 4.4% to $1.06 Wednesday, leaving a market cap of $297.5 million, based on 279.3 million shares outstanding. The 52-week range is $1.20 and 49 cents.
Disclosure: Trevali Mining is a Stockhouse client.