Shares of Inmet Mining (IMN-T) surged $3.12 apiece or 4.76% to close at $68.62 yesterday after the company announced that Panama has approved the environmental and social impact assessment for its Cobre Panama copper project, including the mining operations and related infrastructure, a port facility and a coal-fired power plant.
Korea Panama Mining Corp. now has until Jan. 10 to decide whether it wants to acquire a 20% stake in the project for an investment of about US$155 million. KPMC is a joint venture between Korea Resources Corporation (KORES) and LS-Nikko Copper.
Matt Murphy of UBS Investment Research has a buy rating on the stock and a twelve-month target price of $70 per share. He notes that the ESIA was the “key step for permitting of the project” and believes that while further permitting is required before construction can begin, “many of these permits have already been prepared for submission and were contingent on ESIA approval.” He also reasons that the ESIA approval “will add further impetus to partnership and financing discussions.”
Tom Meyer, a mining analyst at Scotia Capital in Toronto, expects KPMC will exercise its option and has a one-year target price on Inmet of $100 per share.
According to a daily newsletter from Canaccord Wealth Management, a division of Canaccord Genuity Corp., Inmet remains one of the top picks of the firm’s base metals analyst Orest Wowkodaw, as it is “currently trading at a 2012E and 2013E EV/EBITDA of 4.8x and 3.5x, and at a 30.6% discount to his 8% NPV, which compares with his mid-cap base metal producer coverage universe average of 6.2x, 4.6x, and at a 39.6% discount to NPV.”
Cobre Panama is a large open-pit copper development project about 120 km west of Panama City and 20 km from the Caribbean Sea coast, in the district of Donoso, Colon province. The concession is made up of four zones totaling 13,600 hectares. Access to the project area is via the Pan-American Highway system from Panama City to Penonome, surfaced all-weather roads to Llano Grande, and gravel roads via the town of Coclecito.
The topography is low elevation (less than 300 metres) but rugged with considerable local relief covered by dense rainforest. Climatic conditions are tropical with high precipitation levels, high humidity.
The ESIA was submitted to authorities in Panama in September 2010.
Be the first to comment on "Inmet’s ESIA approved for Cobre Panama"