GREY:MLKKF - Post by User
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CalifDreamingon Nov 21, 2008 6:39am
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RBC downgrades- $1 target "significant risk"
RBC downgrades- $1 target "significant risk"Here's a blurb in today's Stockwatch. Hardly a revelation...
The National Post reports in its Friday edition that it is a "race tothe finish line" for Mercator Minerals, according to RBC CapitalMarkets analyst Adam Schatzker.The Post's Peter Koven writes that Mercator is trying to start itsphase I expansion at the Mineral Park mine in Arizona. However, Mr.Schatzker says there is a risk that its cash balance will reach zerobefore the expansion is complete and the company starts to receive cashfrom customers.He says the company "has a high probability of finding itself infinancial trouble. However, we think that if it is able to pullthrough, it's share price could increase substantially." He downgradedthe stock to "underperform" from "outperform" and cut his target 75 percent to $1.00 a share. He called the risks to Mercator's equity"significant," but noted they are, for the most part, reflected in thecurrent stock price. At about 35 cents a share, the stock, he says, iseffectively a call option on the company's future.Mr. Schatzker also assumed that Mercator's phase II expansion atMineral Park will be pushed back a year (to late 2009 and early 2010),noting that the company does not have the financing to do it soonerbased on his forecasts.