Speculative Buy , Target C$3.20Andina Minerals | Steven Butler, 1.416.869.7918
Canaccord Adams
Daily Letter Summary 4 March 2009
ADM : TSX-V : C$1.54 | C$122.2M |
Speculative Buy , Target C$3.20
• Updating valuation and target for peak gold price.
SPEC BUY, $3.20 target
Event
Following our February 18th increase in our peak gold scenario to $1,100 from $950, we
have increased our target price on Andina's shares to C$3.20 from $C2.50. Our revised
target reflects a 0.70 times multiple to our 10%/$1,100 peak gold diluted NAV of C$4.58.
Changes to our valuation include pushing out our modelled start date to Q3/2012 from
Q1/2012, and raising the equity financing assumption on 40% of capital requirements to
C$2.00 from C$1.20, which had been assumed in October 2008. Our financing assumption
is 44% dilutive to our 10%/$1,100 peak gold NAVPS.
Effective Jan 19, 2009, the company appointed George Bee (former COO of Aurelian
Resources) as president and CEO with an immediate focus to assemble and lead a team to
complete a technical study of the Volcan project in 2009. To this end, on March 2, 2009,
the company appointed Keith McKay as executive V.P. (most recently CFO of Aurelian
Resources), and Alejandro Labbe as V.P. Project Development (most recently Project
Manager at Hatch Engineering Chile).