Why it is a good time to get into Lundin Gold stock and the company's major move in response to COVID-19 are covered in an Echelon Wealth Partners report.
In a March 23 research note, Echelon Wealth Partners analyst Ryan Walker wrote that the big recent pullback in Lundin Gold Inc. (LUG:TSX; FTMNF:OTCMKTS) stock "represents an excellent entry point as we look for the company to recapture the lost ground post COVID-19 on expectations of gold strength during the balance of 2020 and longer term."
Walker highlighted that with most of Lundin Gold's year-to-date gains gone, a rerating could be imminent. It is well below its recent high of $12.69 achieved when the company became a producer and gold prices were high.
Vancouver-based Lundin recently announced it achieved commercial production at Fruta del Norte, Walker noted. It successfully ramped up production to an average throughput of 70% of mill capacity and maintained that level for 90 consecutive days
Though no coronavirus infections have been reported among workers at Lundin Gold's Fruta del Norte gold mine in Ecuador, the company, in a proactive move, temporarily halted production there in light of COVID-19, reported Walker. To minimize the effects of the shutdown, care and maintenance and special projects will be undertaken until production is resumed.
Walker also relayed that the Ecuadoran government waived for its mining industry the new restrictions on the domestic transport of goods and services initiated due to the coronavirus. Lundin is working with its contractors to ensure the export of its concentrate and doré continues uninterrupted and to secure the goods the company needs.
Echelon has a Buy rating and a CA$12.75 per share price target on Lundin Gold; the stock is trading now at around CA$8.62 per share.
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Disclosures from Echelon Wealth Partners, Lundin Gold Inc., March 23, 2020
Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking.
I, Ryan Walker, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.
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