Tuesday, October 26, 2010

Globe says Lundin Mining target boosted to $8 lun.to, czx.v, tnr.v, mai.to, fcx, rio, bhp, tck, bwr.to, cs.to, imn.to, tko.to, wrn.to, qux.to

We have first upgrades and boost in a share price target for Lundin Mining after the Tenke Fungurume news.

"Lundin Mining is in no way a junior mining company, will have attention from Majors in the Copper sector. Freeport McMoran - J/V partner on Tenke Fungurume - will be a natural suitor for this Jewell. In our logic it have to attempt at least to buy out the share of Lundin Mining in Tenke Fungurume - otherwise it will be done by others and Chinese, who are very active in DRC, will be backed by the DRC government in this case. An outright bid for all Lundin Mining operations could be in the cards as well.

We believe that Lukas Lundin will have to make his move and show that now - with cash flow from Tenke Fungurume and further expansion of production in DRC - he can build value in Lundin Mining itself. Realisation of the facts, described above, by the market could bring the share price north of CAD10.0 (we will not be surprised to see a target price of this magnitude with company's book value at around CAD5.2 now and E/P at CAD 0.13 in Q2 2010). Lukas will be again in a very favorable position after these very tough few years for the company. He can and should use his currency - shares in the company above CAD10.0 to buy another companies with sizable projects at still undervalued valuations among juniors. He should definitely, in our opinion, to study well opportunities for acquisition in CIBC report. His another company - NGeX Resources is a part of that M&A list with its properties in Argentina, Chile, Africa and Canada is moving up nicely in price these days as well. TNR Gold has a few J/V projects with NGeX Resources in Argentina. Lukas Lundin was buying recently NGeX Resources in the market."


Globe says Lundin Mining target boosted to $8

2010-10-26 05:45 ET - In the News

The Globe and Mail reports in its Tuesday edition that Lundin Mining jumped 15 cents to finish Monday at $6.90. The Globe's Darcy Keith writes in the Eye On Equities column that Lundin Mining stock has a 52-week range of $2.91 to $7.04. Lundin Mining will now hold a 24-per-cent ownership interest in the Tenke mine following an agreement between Freeport-McMoRan Copper & Gold and the government of the Democratic Republic of Congo. CIBC World Markets analyst Alec Kodatsky says the deal clears the way for further investment to expand the mine. Mr. Kodatsky boosted his price target by half a buck to $8. UBS Securities Canada analyst Onno Rutten upgraded his rating on Lundin Mining to "buy" from "neutral" with a price target of $5.20 in the Eye column on June 23. The stock was then worth $3.62. TD Securities analyst Greg Barnes maintained Lundin Mining at "buy" in the Eye column on Feb. 24. Lundin Mining stock could then be had for $4.44. Mr. Barnes targeted the stock at $7. The Globe's Allan Robinson wrote on Sept. 18 that Lundin Mining stock still had room to rally. It was then trading at $3.89. The Globe's David Parkinson said Lundin Mining was underpriced on Sept. 2. It was then worth $3.71.


FP says HudBay missed a big opportunity with Lundin

2010-10-26 06:03 ET - In the News

See In the News (C-HBM) HudBay Minerals Inc

The Financial Post reports in its Tuesday, Oct. 26, edition that Lundin Mining's successful conclusion of the review of Tenke Fungurume Mining's contracts in the Democratic Republic of Congo must have HudBay Mining shareholders wondering what life would be like now had the Nov. 21, 2008, merger gone through. The Post's Barry Critchley writes that it is a certainty that HudBay shareholders would have ended up a lot better off had the miner been successful in issuing $488-million of stock and buying Lundin. Try about $800-million better off, or $5 to $6 a share given that HudBay has 149 million shares outstanding. HudBay shares closed Monday at $16.39. As of Monday, HudBay has a market cap of $2.44-billion, while Lundin has a cap of $4-billion -- a gap of $1.56-billion. Half the difference, or $780-million, was left on the proverbial table by HudBay shareholders. "By their actions the HudBay shareholders have deprived themselves of an enormous windfall," says an unnamed observer. Another unnamed observer says, "Notwithstanding all the noise at the time, it looks like that the smartest guys in the room were actually" former chief executive officer" Allan Palmiere and the board of HudBay after all."

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