RBC DOMINION says strong buyCONCLUSION
These results were relatively uneventful, the Diavik project must now look to push ahead on schedule,
and with this should come increased levels of confidence and investor interest. It was after all feasibility
and permit studies were completed that Dia Met’s share price increased by 60% in early 1997. Our DCF
stands at C$16.53 per share using a 5% discount rate with the 0.70x’s multiple comparing favourably to
Dia Mets multiple of 1.20x’s. With the market searching for undervalued targets, Aber remains a cheap
entry into one of the world’s highest margin mineral deposits. The added value for Snap Lake (C$2.50 per
Aber share) associated with De Beers takeout of Winspear, C$2.90 per share in cash coupled to the
potential corporate sale of the Franco Nevada stake offers a number of positive elements to this story. Our
one year target remains C$16. Ranking 1 (STRONG BUY).
FRANCO BLOCK SALE WILL BE INTERESTING AS THEY DONT WANT TO BE PART OF DIAMONDS. PRODUCTION DECISION WILL PUT ABERIN PLAY PRIOR TO ABER ARRANGING FINANCING. WITH TECH WEAK ABER SEEMS TO TRADE HIGHER AS VALUE COMES BACK IN VOGUE.