Scotia Capital has initiated coverage of
Lucara Diamond Corp. (
TSX: T.LUC,
Stock Forum) with a sector perform rating and a one-year stock price target of $2.15.
The company’s 100%-owned Karowe mine in Botswana is quickly becoming one of the world’s best-known producers of large, high-quality gem diamonds and has become the poster child for diamond development projects, with its 187% return over the past 12 months, Scotia analyst Craig Johnston said in a research report.
“We expect good news to continue for Lucara as we anticipate 2014 revenue to exceed guidance and anticipate a steady recovery of special stones as mining transitions more into the South Lobe of the AK6 kimberlite,’’ Johnston said in the report.
Lucara shares were unchanged at $2.02 on Thursday, leaving a market cap of $761.8 million, based on 377.1 million shares outstanding. The 52-week range is $2.02 and 73 cents and the stock is up 150% from 80 cents in July, 2013.
“We believe upside exists with the increasing recovery of special stones; however, in our opinion, Lucara shares are relatively fair value based on current pricing and size information,’’ Johnston said.