TD Waterhouse on no-vote impact to CNL -Continental Gold IncAs CNL is another Canadian gold company operating in Colombia I thought this might be of interest here:
Rating and target unchanged at SPEC BUY and $6 or about 50% upside in 12 months per TD:
EvEvent:
Sunday night, Colombian voters narrowly rejected a peace accord negotiated over a
four-year period by the government and the FARC rebel group to end a five decades
long, low level insurgency.
Impact: SLIGHTLY NEGATIVE
The result comes as a surprise and disappointment for investors, with the
Colombian Peso and bonds softening in overnight trading.
Both the government and FARC leadership have made statements suggesting
they remain committed to a peace process. With this in mind, an immediate return
to fighting does not seem likely.
However, the vote apparently weakens the position of a government that intended
to pass tax and economic reforms and that has made resource investment a key
part of its security/economic agenda. Negotiations with the ELN, another rebel
group, may be completely off the table now.
While the headlines may dampen enthusiasm for the country in general, we don't
see any direct impact on Continental Gold, whose Buritica project is not located
in an area of significant rebel activity. In Antioquia Department, this mainly occurs
in the far west and north-central part of the department.
The company is nearing the expected completion of the permitting process for its
Buritica project, with the final permit expected in Q1/17.
We estimate that the company is fully funded through to a production decision,
with $31mm in available funds (as per the company's September presentation)