OUTPERFORM $20 target credit suisse Analyst Actions: Credit Suisse Maintains Outperform Rating, $20 TP on Tahoe Resources After Q4 Production; Tweaks Estimates
01/10/2017 13:02 | MT Newswires
01:02 PM EST, 01/10/2017 (MT Newswires) -- Credit Suisse noted on Monday that Tahoe Resources' Q4 2016 production results were solid. Silver production at Escobal of 4.8Moz delivered FY16 at the high-end of guidance, while gold production of 120Koz exceeded Credit Suisse's 109Koz owing to outperformance at the Peruvian operations (catching up from a relatively weaker Q3) and delivers FY16 within guidance.
Escobal silver production guidance in-line. FY17 silver production guidance at Escobal of 18-21Moz is in-line vs. CS's 20Moz (consensus: 20.5Moz). FY17 silver cash cost of $7-8/oz compares to our $7.14/oz (consensus: $6.89/oz).
Gold production light due to lower grades at La Arena. FY17 gold production guidance of 375-425Koz is ~6% below CS expectations (~7% below consensus) due to lower grades at La Arena. FY17 gold cash cost guidance of $700-750/oz is in-line vs. CS's $700/oz (but above consensus of $622/oz).
Total FY17 capital expenditure guidance of $310-350 million (including $160-175 million in sustaining) is above Credit Suisse's $220 million (consensus $212 million) and driven primarily by continued investment in leach pad and waste dumps in Peru, ongoing development efforts in Canada (Timmins + Bell Creek), and timing of capital spend at the Bell Creek shaft project (total project capex of $80Mln is unchanged).
Maintain Outperform, $20 TP. Revised 2016/17/18 EPS of $0.69/0.62/0.90 (from $0.66/0.74/0.97) reflect Q4 2016 production and model adjustments for FY17 guidance.
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