UPDATE: Bank of America Merrill Lynch Reiterates Neutral Rating, Raises PO on Royal Gold
In a report published Friday, Bank of America Merrill Lynch reiterated its Neutral rating on Royal Gold (NASDAQ: RGLD), and raised its price objective from $83.50 to $88.00.
BofA Merrill Lynch noted, “Based on a 5% higher net asset value (NAV), we have raised our PO from $83.50 to $88.00/sh. We are now modeling a 22 year mine life for Mt. Milligan (as per the feasibility study completed by mine owner Thompson Creek) versus our prior more conservative mine life forecast of 17 years. Royal Gold owns a 52.25% gold stream interest on the gold production from the Mt. Milligan mine. While Mt. Milligan will provide a substantial stream of free cash flow, we are concerned that it accounts for 45% of our NAV estimate for Royal Gold.”
Royal Gold closed on Thursday at $84.18.
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