Rio Alto Mining Limited RIOAF

CIBC Maintains $8.00 Target

[retiredcf]

According to yesterday's analyst report. GLTA

 

 

Rio Alto Mining Limited

Revenues Lower On Shipment Timing, Key Catalysts Moving Into View

? While operations continue as expected, progress continues on defining the longer-term potential of La Arena. With better defined mine plans from recent drilling, exploration potential, and an attractive valuation, once it is further derisked we believe it will ultimately be a takeout candidate.

? Rio Alto reported adjusted Q3 EPS of $0.06 compared to our expectations of $0.09 and consensus of $0.11. CFPS in the quarter was $0.09 versus our estimate of $0.12 and consensus of $0.15. The miss was a result of lower-than-expected oz. sold in the quarter, offset by lower operating costs.

? Production results were pre-released, totaling 47,010 oz. Au; however, cash costs were in line at $634/oz Au. Lower-grade ore from the Ethel pit accessed in Q3 will continue into 2013, when we believe production levels of 200,000 oz.-225,000 oz. can be reached.

? Production guidance for 2012 was maintained at 190,000 oz.-210,000 oz. Au at cash costs of $500/oz-$550/oz Au. Upcoming catalysts include drilling results, new mine plans for the oxide and sulphide portions of the deposit, and the start of exploration at La Arena. Our PT is unchanged at $8.