RE:Dundee research note....TD has a pretty similiar note out:
NEVSUN RESOURCES LTD. (NSU-T, NSU-A; C$4.22)
BUY (Unchanged); Target: C$5.50 (Unchanged)
Craig Hutchison, P. Eng.
416 982 3474 craig.hutchison@tdsecurities.com Derick Ma, CPA, CA (Associate)
416 308 3404 derick.ma@tdsecurities.com On Sunday, April 24, Nevsun announced that it had entered into a definitive agreement to combine with Reservoir Minerals (RMC-TSXV). The transaction, which is expected to close in Q2/16, would consolidate a 100% interest in the high-grade 'Upper Zone' of the Timok copper-gold development project in Serbia. Nevsun's proposed combination with Reservoir consists of two components: 1) a 'funding transaction' to allow Reservoir to exercise its 'right of first offer' (ROFO) to match Lundin Mining's
March 3 offer and 2) the acquisition of all outstanding shares of Reservoir. Factoring in the ROFO financing and acquisition of Reservoir, we estimate that Nevsun is paying ~$624mm to consolidate a 100% interest in the Upper Zone. Our C$5.50 target price and BUY rating are unchanged. We believe that the proposed acquisition of Reservoir provides exposure to a high-quality asset in Timok, and geopolitical diversification along with significant development flexibility and growth potential.