Stonecap Price Target Stonecap analyst Christos Doulis notes that as the effective settlement price of US$1,728 an ounce is higher than its 2013 and 2014 gold price forecasts of $1,700 an ounce, and $1,600 an ounce, respectively, the transaction is "NAV" [net asset value] dilutive.
"Retiring the Macquarie hedge book provides SilverCrest with enhanced near-term leverage to gold and although mildly NAV dilutive, our short-term CFPS estimates for SilverCrest have increased significantly."
Stonecap maintained its "outperform" rating on the stock, and increased the price target to $3.85 from $3.75 previously.
While SilverCrest has eliminated its hedge book with Macquarie, the company’s Sandstorm gold stream is still in place. Sandstorm has the right to buy 20 per cent of gold production from SilverCrest's Santa Elena mine in Mexico, at $350 per ounce of gold, rising to $450 per ounce of gold after the purchase of 50,000 ounces.