Friday’s analyst upgrades and downgrades

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Inside the Market Roundup of Some of Today’s Key Analyst Actions

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Raymond Gems analyst Farooq Hameed believes cost performance will continue to be an important focus for mining companies in the fourth quarter.

In a research report reviewing the recently completed earnings season, he emphasized that many companies in their coverage universe warn that the full-year cash cost and all-in-cost of maintaining all are within the guidance range. Could come on the upper end because “inflation is pushing consumables, labor, and logistics costs higher.”


“Notable guidance improvements came from B2Gold Corp. and Ivanhoe Mines Ltd., while New Gold Inc. lowered full-year guidance ahead of its quarterly results,” he said. “For BTG, the continued outperformance from Fecola Mill allowed for higher-than-expected throughput, allowing the company to increase its 2021 production guidance by approximately 4 percent. For IVN, smooth startup and rapid ramp up of nameplate capacity at the mill led to a 7 per cent increase in production guidance in 2021. In the NGD, poor grade cohesion affected the eastern lobe of the ODM region on the Barasati river. 3Q production causes a reduction in full-year guidance.”

Previewing the fourth quarter, Mr. Hameed expects and forecasts improvement in operations from several base and precious metals companies Yamana Gold Inc. (YRI-T, “Market Performance” and US$6 Target), Ivanhoe Mines Limited (IVN-T, “Outperform” and $12.50) and Hudbay Minerals Inc. (HBM-T, “Outperform” and $12) could also see its “strongest” quarter of the year.

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“With the full-year guidance refinements made in the coverage group in 3Q, we expect our coverage companies to generally meet operating guidance except for IVN, where we anticipate the company is at the upper end of its production range.” positioned to beat.”

Mr. Hameed made these goal changes:

  • Arrow Copper Corp. (ERO-T, “outperform”) from $30 to $28. The average on the road is $29.73.
  • Lundin Mining Corp. (LUN-T, “Market Performance”) from $13.50 to $13. Average: $12.05.
  • Agnico Eagle Mines Limited (AEM-T, “Outperform”) from US$74 to US$73. Average: US$76.78.
  • Kinross Gold Corp. (KT, “Outperform”) from US$8.50 to US$9. Average: US$9.58.
  • OceanGold Corp. (OGC-T, “Outperform”) from $3.25 to $3.50. Average: $3.44.


Desjardins Securities analyst Jonathan Agillo named Friday’s handling of coverage of six precious metals companies K92 Mining Inc. (KNT-T) His “Top Pick.”

“We believe that the stock is not being properly valued against the Kayananthu mine offering,” he said. “As drilling focus shifts to Judd, we believe that expanding this deposit, as well as deepening and striking Kora, can provide substantial NAVPS accretion. Drilling from K92 Mining has led to regular and we believe continued strong results, particularly in Judd, could be market pricing in the larger life scenario.

Anticipating resource expansion drilling in 2022, Mr. Agilo set a “buy” rating and a target of $11.75 for K92 shares. According to Refinitiv data, the average on the Street is $11.36.

Analyst also started coverage Lundin Gold Inc. (LUG-T) with a “Buy” rating, calling it “a leading, quality company within the intermediate space.”

“Lundin Gold’s Fruta del Norte (FDN) is one of the world’s lowest-cost gold mines and commands the lowest 2022 AISC. [all-in sustaining cost] Estimate within our collective intermediate peers (excluding those with significant by-product credit),” he said. “Additionally, despite the relatively short operating history, since commissioning FDN in 2020, management has gained a reputation for exceeding expectations. 2H20 guidance was exceeded, and thus far through the nine months of 2021. In the meantime, the Company is tracking towards the very upper end of the guidance. In our view, there is a strong likelihood that Lundin Gold will exceed the upper end of its 380–420koz 2021 production guidance.”

Mr. Aglio set a target of $13.75 for Lundin shares, lower than the average of $15.03.

They also assumed coverage of the following companies:

  • America Gold & Silver Corp. (USA-T) with a “Hold” rating and a $1.40 target. Average: $1.98.
  • Ascot Resources Limited (AOT-T) with a “Buy” rating and a $1.75 target. Average: $1.81.
  • Liberty Gold Corp (LGD-T) with a “Buy” rating and target of $1.70. Average: $2.43.
  • Osisco Development Corp. (ODV-X) with “Buy” rating and $8.25 target. Average: $10.20.

“With the exception of K92 mining, our coverage universe is largely the focus of the US,” the analyst said. “We also note that two out of three producers are single-asset companies, placing them in the M&A conversation. Notably, Lundin Gold Management notes that it recently began evaluating external opportunities. Since the 4,200tpd expansion in Fruta del Norte is largely complete. We also see US gold and silver as an occasional company for M&A, because of its potentially silver-focused Discounted valuations for the portfolio can lead to acquisitions.

“The three developers are North America-focused, with Liberty Gold in Idaho and Ascot and Osisco Development in British Columbia. All three companies provide exposure to investors at various stages of the developer lifecycle, ranging from Liberty Gold, which was recently released to Black. The resource has been announced for the first time in Pine, with Ascot which has received construction financing and is about 12 months away from the planned first gold. The third company, Osisco Development, is among the other two in terms of its advancement stage, and is expected to be completed by 2022. The U.S. is looking to obtain permits while simultaneously executing a large-scale drill program in Caribou.


After the release of “blockbuster” third-quarter financial results, Echelon Capital Partners analyst Amar Izzat said Radishred Capital Corp. (KUT-X) continues to present “extraordinary risk-reward characteristics at current levels”.

As many of the company’s franchises are up for renewal over the next three years, we expect management to cherry-pick and deploy more capital into accretion tuck-in, he added. “The acquisition highlights KUT’s larger M&A pipeline with less risk. Namely, we estimate that the company can more than double its revenue through the roll-up of its franchisees. We recently named it one of Echelon’s top picks.”

After the bell Wednesday, the Mississauga-based company reported sales of $9.8 million, up 46.8 percent year-over-year and exceeding estimates by both Mr. Respect ($8.4 million) and Street ($8.9 million). Earnings before interest, taxes, depreciation and amortization rose 53.1 percent to $2.9 million, which is also top estimates ($2.4 million and $2.6 million, respectively).

Noting that the results demonstrate “extraordinary earnings momentum,” the analyst said: “This is a high-quality green driven by strong organic growth, which is up 22 percent from corporate locations on an organic and constant currency basis.” With year-on-year sales, we expect continued strong performance.”

Maintaining the “buy” recommendation, he raised his target for Redishred shares from $1.25 to $1.50. The average on the road is $1.35.

Others making the change include Devin Schilling of PI Financial from $1.20 to $1.30 and Nick Corcoran of Acumen Capital from $1.15 to $1.25. Both held “Buy” ratings.

“We view record Q3/21 results as positive. Catalysts include acquisitions and improvements in operating performance,” said Mr. Corcoran.


Canaccord watches Genuity analyst Mark Rothschild canadian net real estate investment trust (NET.UN-X) as “attractive to investors seeking a sustainable and growing distribution, which is …


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