-- National Bank of Canada on Thursday downgraded Arizona Metals' (AMC.TO) rating to sector perform from outperform while its price target was reduced to C$0.25 from $0.90.
The changes were based on 0.4x asset NAVPS plus corporate adjustments, the bank said.
Arizona Metals recently announced the results of a preliminary economic assessment on its Kay project in Arizona. The study did not meet expectations, with high costs and complex refractory metallurgical processing, National Bank said.
The bank updated its base-case model, with the Kay project now carried at nil, leaving a US$75 million potential resource credit for future exploration at the Sugarloaf Peak asset.
"Going forward, we expect AMC to take some time to reset expectations before refocusing on exploration targeting," National Bank said. "We expect future upside opportunities to be primarily driven by commodity price backdrop and identification of exploration opportunities that are contingent on drill permits and financing ability."
Arizona Metals traded at $0.29 per share at last look Friday on the Toronto Stock Exchange.
Price: $0.29, Change: $-0.01, Percent Change: -3.39%