Whitehaven’s Narrabri coal mine has received permits for its Stage 3 expansion, triggering a US$5 million payment to Ecora Resources PLC (LSE:ECOR, TSX:ECOR, OTCQX:ECRAF), notes Peel Hunt.
Payment will be made in instalments, the broker believes, which says the development is a marginal positive for Ecora, adding additional cash flows from the Narrabri disposal "that we believe are not included in consensus estimates for the group".
“While the amount is not substantial, we expect that the inflow will enhance management’s capacity to consider small, infill royalty transactions,” analysts added.
Buy with a target price of 140p is the broker’s view.