SFR - Credit Suisse rates as Underperform
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The company has finally achieved in-principle agreement with Talisman ((TLM)) to acquire its 30% interest in the Monty underground copper mine and Springfield exploration JV. The price is $72m cash plus a 1% NSR royalty on future discoveries within the Springfield JV.
Credit Suisse understands the benefit of paying a full price to remove complexity and save management costs in a small deal such as this but hopes that the company does not use the same pricing approach for future transactions, unless the currency used is SFR paper. Rating is Underperform. Target is $6.70.
Target price is $6.70.Current Price is $9.61. Difference: ($2.91) - (brackets indicate current price is over target). If SFR meets the Credit Suisse target it will return approximately -43% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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