UBS initiates coverage on Gold Road Resources with a Buy rating and $1.94 target. The 50%-owned Gruyere gold mine is considered to offer exposure to a long-life producing gold asset with its best years ahead.
The analyst expects increased production with almost no additional capex, and the increased production rates should keep downward
pressure on unit costs.
The company has a 9.4% five year gold production compound annual growth rate (CAGR), which the broker finds compelling in a sector struggling for growth.
Sector: Materials.
Target price is $1.94.Current Price is $1.70. Difference: $0.24 – (brackets indicate current price is over target). If GOR meets the UBS target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).
