RE: RE: CIBC CIBC World Markets Inc. analyst Jeff Killeen lowered his price target on shares of Canaco Resources Inc. (CVE:CAN) to $2.80 from $4.50, while maintaining its "Sector Outperformer" rating.
The brokerage narrowed its 2013 loss per share estimate to
.06 from
.17, while maintaining its 2012 loss estimate of
.06 and its 2014 loss estimate of
.06.
Based on revised estimates for the Magambazi resource, Killeen is decreasing his price target for Canaco. He is maintaining his rating in recognition of the potential upside in valuation with respect to the current share price.
The analyst is reducing his expectations for total ounces within the Magambazi deposit from 3.5 million oz. to 2.2 million oz., based on drilling results that have been released over the last six months. He believes there is a potential for overall grade to increase from our initial 3.0g/t estimate to 3.4g/t for the open pit.
Although it is possible a portion of the resources may be extracted via underground mining, Killeen expects that the upcoming PEA for the project may consider only open pit extraction. He has altered his valuation to an open pit-only scenario and reduced expected capital spending accordingly.
CAN is currently trading at about 0.3 times the brokerage's revised 5% discounted NAV compared to the current non-producer average of 0.5 times. Its revised PT is based on a 0.6 times multiple, down from 0.8 times, recognizing multiple compression, particularly for junior explorers, may continue through 2012.
Canaco Resources, an exploration stage company, engages in acquiring and exploring gold projects in Tanzania. It primarily holds 100% interests in the Handeni gold project that consists of 2 contiguous mineral tenures covering 100 square kilometers located 35 kilometers south of the Handeni town.
CAN is trading down 0.95% at $1.04 on Monday