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Credit Suisse’s Anita Soni believes the higher political risk perceived due to the exposure of Eldorado Gold Corp (USA) (NYSE: EGO) to Turkey has been reflected in the 15 percent underperformance of the stock, as compared to its gold peers, since July 15.
Soni upgraded the rating on the company from Neutral to Outperform, while raising the price target from $5.00 to $5.50.
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Greater Clarity
The analyst mentioned that the September 7 investor day has helped improve clarity regarding Eldorado Gold’s longer term outlook, declining Turkey exposure headwind and attractive P/NAV.
“While President Erdogan's crackdown against purported organizers of the failed coup remains ongoing, we note that foreign investment has not been impacted and the three-month State of Emergency is set to expire on October 21,” Soni stated.
Growth Drivers
The analyst believes there are growth drivers that could raise AISC from 400koz in 2017 to 830koz in 2020, including the Kisladag expansion to 20Mt per year; Olympias Phase II, which is scheduled to begin in 2017; Skouries Phase I, expected to begin in 2019; and Tocantinzinho, which is scheduled for a late 2019 start.
“We estimate EGO has sufficient cash on hand and available credit to maintain US$100Mz cash and fund its growth plans until 2020 at $1,300/oz, when we estimate EGO would need to refinance US$195 million of its $600 million debt principal due,” the analyst added.
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New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.