G&M Analyst upgrades/downgrade * CIBC’s Bryce Adams raised his Lundin Gold Inc. (
) target to $20 from $18.50 with an “outperformer” rating, while Canaccord Genuity’s Michael Fairbairn bumped his target to $18 from $17 with a “buy” rating. The average is $17.64.
“Pre-market [Monday] morning, LUG announced the results of a reserve and resource update for its Fruta del Norte Mine (“FDN”) located in Ecuador,” said Mr. Fairbairn. “The update showcased effective reserve replacement by LUG at the mine, with total reserves having increased net of depletion since mining began in 2019. Recall that this is the first full updated R&R estimate for the deposit since April 2016, though the company provided a previous reserve update in 2021 (with non-material changes vs. the 2016 update).”
“In this update, we believe LUG has demonstrated the benefit of its ongoing conversion drilling programs, which managed to not only replace but also modestly increase reserves at FDN. The deposit retains a sizable reserve base after three years of mining and offers compelling opportunities to extend FDN’s reserve-base mine life via future conversion of the 1.7Moz of Inferred resources near the deposit’s lower-grade South Domain. Following this R&R update, we now forecast an additional 900koz of total production from FDN over an identical 13-year mine life (until 2036), lifting our estimate for average annual gold production to 413koz from 346koz over this period. Looking beyond the near-term impact, we continue to see attractive potential in the broader FDN land package for additional discoveries and/or a mine-life extension at FDN.”