Morgans reduces the target price for Berkeley Energia to $0.483 from $1.09, to reflect an increased discount from -25% to -75% to the net present value of the Salamanca project based on the company’s feasibility study valuation.
Despite the project having successfully secured the relevant sequential approvals for the Salamanca development, appeals against the permits and approvals by globalised activists have consistently stalled development, explains the broker. It’s anticipated that further appeals and challenges will arise.
The analyst considers the Salamanca project a robust development using conventional mining, heap leach, and processing technology, used previously in the region.
Financial backing from the Sultanate of Oman sovereign wealth fund significantly mitigates financial risk for the development, in Morgans’ opinion.
The Add rating is unchanged .
Sector: Energy.
Target price is $0.48.Current Price is $0.39. Difference: $0.09 – (brackets indicate current price is over target). If BKY meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges – negative figures indicate an expected loss).
