Scotia Capital has initiated coverage of Stornoway Diamond Corp. (TSX: T.SWY, Stock Forum) by setting a one-year target of $1 for the stock.
Stornoway is the 100%-owner of the fully permitted, fully financed shovel-ready Renard diamond project in mining-friendly Quebec, writes Scotia analyst Craig Johnson in a research report.
The stock rose 1.45% to 70 cents on Wednesday, leaving a market cap of $511.7 million, based on 730.9 million shares outstanding. The 52-week range is $1.22 and 49 cents.
“Stornoway currently trades at a 34% discount to our net asset valuation of $1.03 per share, and we see tremendous upside to our valuation in the long term based on the potential for consistent recovery of large stones, as well as the addition of inferred resources and targets for further exploration,’’ he said.
He went on to say that the Renard project will be a unique addition to Canada’s portfolio of diamond mines, as it will be the first diamond mine in Canada with year-round road access, it will be the first diamond mine located in the province of Quebec, and its high proportion of gem diamonds is expected to stand apart from the rest.
