Stifel GMP analysts have raised their price target for Patriot Battery Metals Inc (TSX-V:PMET, OTCQB:PMETF, ASX:PMT) following recent positive developments with the company, including significant exploration success pointing to increased tonnage at Patriot’s Corvette property in the James Bay region of Quebec.
In a note to clients, the analysts wrote they were raising their target price to C$16 from C$8.25 while maintaining their ‘Speculative Buy’ rating.
“Thanks to recent exploration success and positive results from metallurgical testing, we now have greater visibility in a future development scenario at Corvette and subsequently we have updated our model using a discounted cash flow analysis to arrive at a new target price of C$16/share,” the analysts wrote.
READ: Patriot Battery Metals a 'Speculative Buy' for Stifel analysts following promising maiden drill results at Corvette property in Quebec
Patriot’s Toronto-listed shares are currently trading at C$14.12.
Analysts noted additional catalysts, including that growing cash balances and increased financial strength among the major producing companies could potentially find a home in the form of investments or outright acquisition of North American developers as producers look to grow production in a jurisdiction ideally located for the coming growth in the electric vehicle industry.
Other catalysts are Patriot as a potential partner for OEMs or battery manufacturers needing to secure sources of supply and the high exploration potential at the company's land package, the analysts wrote.
“We are retaining our ‘Speculative Buy’ rating on the stock in consideration of the above-noted catalysts and the potential for a mine of considerably larger scale than our base case, and correspondingly higher valuation, should the resource grow,” Stifel analysts wrote.
They concluded: “We also highlight that our model assumes a long-term price for 6.0% lithium spodumene concentrate (SC6.0%) of $1,750/ ton, materially below spot, leading to considerably higher upside should current pricing prove persistent.”
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