RE:Scotiabank 1-Yr.Target: C$2.25
Company Profile
Following the Glencore acquisitions, Trevali will be the world’s largest pure play, non-integrated zinc miner and the 8th largest zinc producer globally. The company’s major assets will include four operating mines in Peru, Canada, Burkina Faso, and Namibia, as well as the Halfmile/Stratmat development project in Canada. Glencore is TV's strategic partner, owning 25% of TV's shares and purchasing 100% of concentrate from all of the company's operating assets.
Latest Research (1 May 2017)
OUR TAKE: We have updated our estimates to reflect the company's recently filed 43-101 TR's for the newly acquired African assets, the change of functional reporting currency to USD, and other assumed modelling changes as noted below.TV shares are rated SO based on the company's very high exposure to zinc (our preferred NT commodity), compelling relative valuation, and solid balance sheet. Our 12-month target of C$2.25 per share is based on a 50/50 mix of 5.0x our 2018E EBITDA and 1.0x our updated NAVPS(8%). We note TV trades at ridiculously low pro-forma EV/EBITDA multiples of 1.7x in 2018E and 1.2x in 2019E vs. peers at 5.7x and 5.4x.