In a note Thursday morning, Canaccord's Canadian equity research team upgraded shares of Kinross Gold Corporation KGC citing a recent pullback in the stock as an opportunity.
Despite a 23 percent fall in recent weeks due to strikes at Tasiast and year-long strong performance, Canaccord still sees a 35 percent return with a price target of $7.75 Canadian dollars.
Canaccord believes the Street has finally re-rated shares of Kinross to peers due to:
- Reliable operating performance
- Currency tailwinds
- Delayed weak oil price impact
- Tasiast's improved long-term outlook as FCF generator
- Delayed and moderated production cliff of two years
In terms of further catalysts for the stock, Canaccord says these are three factors to watch for:
- Site visit to Bald Mountain at the end of June.
- Vantage pit receipt permit at Bald Mountain, expected mid-2016 with immediate reserve conversion of approximately 0.6Moz
- Potential early shutdown of Maricunga
Shares of Kinross closed on the day at $4.51, up 2.27 percent.
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