Candelaria Mining Corp T.CAN

TD Updated Take on Dispute

[bigguy6]

TD's update this morning on dispute.  Looks like they are not concerned and continue to maiantain their spec buy rating w/ $6 price target.


Canaco Resources Inc.

(CAN-V) C$3.05

Resolution to Competing Claims Expected by November 29

Event

Canaco provided an update on Friday afternoon following its meeting with the

Commissioner for Minerals of Tanzania regarding the small overlapping

claim on its Magambazi discovery.

The Commissioner asked that all parties hold discussions to resolve the matter

amicably and report back to him no later than November 29.

Impact - NEUTRAL

We take this to mean that the Commissioner will unilaterally decide the

matter if an agreement is not reached by this date. Possible resolutions that we

see include (1) the transfer of the license from the third party to Canaco at fair

market value, which we continue to believe will be immaterial to Canaco, or

(2) revoking the overlapping Mining License (ML), which is within the power

of the Commissioner to do.

Our view then is unchanged – we expect Canaco to maintain 100% of all of

its properties and for any settlement to be immaterial to it but the timeline for

resolution has now been pushed back to November 29.

We maintain our 12-month target price of $6.00/share and reiterate our

Speculative BUY recommendation.

Details

According to the company:

• The meeting at the offices of the Commissioner discussed how best to

resolve the competing interests between the 0.07 km2 ML acquired by

Sonora Gold & Silver Corp. (SOC-V; not rated) and the 200 km2

Prospecting License (PL) held by Canaco located in the Magambazi

Mineral Property.

• The Commissioner stated that it was in the interests of the Government

to have the Magambazi Mineral Property developed into a large scale

mine in the future by consolidating the area covered by the ML with the

PL controlled by Canaco.

Gold & Precious Minerals

Recommendation: SPEC. BUY

Unchanged

Risk: SPECULATIVE

12-Month Target Price: C$6.00

Unchanged

12-Month Total Return: 96.7%

Market Data (C$)

Current Price $3.05

52-Wk Range
.33-$4.20

Mkt Cap (f.d.)($mm) $547.5

Dividend per Share --

Dividend Yield --

A vg. Daily Trading Vol. (3mths) 1,086,415

Financial Data (C$)

Fiscal Y-E June

Shares O/S (f.d.)(mm) 179.5

Float Shares (mm) 93.3

Net Debt/Tot Cap 0.0%

Cash ($mm) $26.0

NAVPS (current)(f.d.) $5.99

All figures in C$, unless otherwise specified.

Daniel Earle Shey Ylonen, CFA (Associate)