The Didipio operation in the Philippines appears to be at risk of disruption as a contingent of locals are blockading access roads and prohibiting supply trucks reaching the mine. Light vehicles, personnel and food supply continue to access the site unimpeded.
The timing appears related to the recent expiration of the current agreement that provides a license and fiscal operating terms for the mine. The company has filed for an injunction against any unauthorised restraint of its operations with a hearing date set for July 10.
More broadly, Credit Suisse points out the incident highlights the challenges of operating in a tier-2 mining jurisdiction. However, the latest incident is expected to be a temporary disruption only. Neutral rating and $4.25 target maintained.
Sector: Materials.
Target price is $4.25.Current Price is $3.55. Difference: $0.70 – (brackets indicate current price is over target). If OGC meets the Credit Suisse target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
