if pending drill results at Thundercontinue to be strong it'll blow away this target price........jmo
Lake Shore Gold Corp. (LSG-T, $1.36)
SECTOR OUTPERFORM, $2.85 Target Price, SPECULATIVE
Lake Shore Gold controls 100% of a portfolio of Timmins-area gold properties, including the Timmins West and Bell Creek assets, hot to combined resources of 2.0 million ounces of gold. We view Lake Shore as the preferred investment vehicle to future discovery in Canada's premier gold-producing region, with past production of more than 64 million ounces of gold, and growing. With the acquisition of the Bell Creek mill and mine and completion of Timmins West prefeasibility, the company has accelerated its production potential to 2009. We estimate production of 28,000 ounces in 2009, increasing to 102,000 ounces of gold in 2010. Lake Shore remains on track for sinking the shaft and advancing the decline at Timmins West, and production from the Timmins project is on track to starting during Q1/09. Successful execution should provide a catalyst for revaluation of the company in line wi8th our $2.85 target price.
Factoring in changes to our metal price assumptions and C$/US$ foreign-exchange rate, we are revising our 12-month target price for Lake Shore to $2.85 from $2.30, while maintaining our SECTOR OUTPERFORM rating and SPECULATIVE risk profile. Our target price is based on a 1.0x multiple of our after-tax project NAV3% of US$364 million, or US$1.95 per share, plus corporate adjustments totaling $0.33 per share. Lake Shore trades at 0.4x project NAV3% , while peers trade between 0.2x and 1.9x (average 0.6x) NAV3%to10%.
- Haywood Securities, Inc. (01/07/09)