Seeing Silver Standard Shares As Fairly Valued, Citi Initiates At Neutral

The acquisition of Marigold generated significant value for Silver Standard Resources Inc. (USA) SSRI, Citi’s Alexander Hacking said in a report. He initiated coverage of Silver Standard with a Neutral rating and a price target of $14.

Following the Marigold acquisition, the focus on cost reduction resulted in significant upside versus the purchase price, analyst Alexander Hacking mentioned. He added that Silver Standard was now FCF positive and had a net cash position.

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Investment Concerns

Silver Standard’s Pirquitas silver mine in Argentina would end San Miguel open pit activities in 2016 and begin lower grade stockpile processing. Stockpile processing would likely extend through late 2017.

The company is exploring the Chinchillas silver-lead-zinc deposit “which could extend the life at Pirquitas, but this may not prove economical,” Hacking wrote. He added that the valuation on the stock was “relatively full.”

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