Coverage ReportMarch 7 (Reuters) - Haywood Securities initiated coverage of Canadian junior miner Avanti Mining Inc with a sector outperform rating, citing confidence in the company's continued focus on its flagship Kitsault molybdenum project in British Columbia.
Haywood analyst Stefan Loannou, who set a price target of 60 Canadian cents on Avanti stock, said the price of molybdenum, which is used in alloys to make aircraft parts, and the undersupplied market were key parameters for the company's fortunes.
"We anticipate a near-term molybdenum price rally will garner additional market interest in high-quality molybdenum-related equities - including Avanti," he said in a note to clients.
A December feasibility study indicated an annual production of 23.4 million pounds of molybdenum at the property, with an average head grade of 0.101 percent in the first five years of operation.
Loannou attributed his optimistic valuation and target price to the high grade, which he said few of Avanti's peers shared, and the production estimate, which would make Kitsault one of the largest advance-development stage projects.
Shares of the Vancouver-based company were flat at 32.5 Canadian cents on Monday morning on the Toronto Venture Exchange.
(Reporting by Abhiram Nandakumar; Editing by Prem Udayabhanu) ((abhiram.nandakumar@thomsonreuters.com)(within U.S. +1 646 223 8780)(outside U.S. +91 80 4135 5800)(Reuters Messaging: abhiram.nandakumar.thomsonreuters.com@reuters.net))
Keywords: AVANTIMINING RESEARCH/HAYWOOD
GLTA
My view on today's reduced SP - A buying opportunity again