What can turn the SP around? Whats Next?
After Hana Mining Ltd. released a disappointing preliminary economic assessment (PEA) and resource update for its 70%-owned Ghanzi project in Botswana on Monday, Canaccord Genuity analyst Gary Lampard concluded that the company will not be able to develop the copper-silver deposit any further.
He downgraded Hana shares to sell from speculative buy and slashed his price target to 60¢ from $3.70.
“We do not believe that Hana Mining has the capacity to further develop the Ghanzi project,” Mr. Lampard told clients. “Thus, our valuation is now a takeout valuation.”
He believes the asset will most likely only have corporate appeal to nearby Discovery Metals Ltd., with first production due in mid-2012.
The stock fell 92¢, or 70%, to 37¢ in early Tursday trading on the TSX Venture Exchange.
The PEA downsized the mining and processing assets due to limited accessibility to mineable ore because of complex geology. However, the company said it still plans to move forward with a feasibility study for the project.
“We view this news as negative, as key project economics came in below both our and the Street’s expectations,” said John Hughes, analyst at Desjardins Securities.
He placing his target price and recommendation on the stock under view, from speculative buy and $3 previously