-- Stifel Canada on Monday lowered its rating on the shares of Arizona Metals (AMC.TO) to hold from buy while cutting its price target to C$0.35 from C$1.50 following the company's release of a preliminary economic assessment (PEA) for its Kay Mine project.
"Following the release of the Kay PEA, we are moving our rating to HOLD and reducing our target price to C$0.35/sh via a 0.40x P/NAV multiple. The predominant reason is based on marginal PEA economics, which detailed suboptimal NPV5% [US$(6)MM @ $3,100/oz Au & $$4.70/lb Cu] and profitability ratio at spot (0.73x). Cognizant PEA studies represent a snapshot in time - and that nearly all VMS mines in production today have witnessed double-digit tonnage accretion post initial resource, we remain constructive on the ultimate exploration upside of the project (+10km of fertile structure). However, with the EXPO permit the gating item, and exploration upside firmly in the 'show me' camp, we think this is a longer dated story (noting the deposit needs to see growth for viable economic return), to revisit towards the latter half of 2026. AMC trades at 0.30x our updated P/NAV," analyst Cole McGill wrote.
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Price: $0.26, Change: $-0.01, Percent Change: -1.89%