Dundee Capital Markets rates Lundin Mining Corp (TSE:LUN) a 'buy'-high risk after it entered an agreement with Freeport-McMoRan to buy an interest in Freeport’s stake in the Timok project in Serbia.
Freeport has 75% stake in the joint venture and is the operator. The price is $262.5mln.
"This is an excellent acquisition and displays the advantage Lundin has over their peers based on their relationship with Freeport and their balance sheet which has put them in an excellent position to capitalize on any assets that are for sale. We believe LUN will continue to be active but opportunistic in M&A. We are reiterating our BUY, Top Pick Rating and $5.25 target," said Dundee.
It said the group's balance sheet can easily handle the acquisition cost as they finished Q4 with $557mln in cash, $350mln in undrawn revolvers and $441mln in net debt.
The broker also has a 'buy' high risk stance on Crew Energy (TSE:CR), whose target price it lifts to C$5.50 from C$5.15. It follows fourth quarter results, which were ahead of the broker's estimates on across the board savings.
"The company’s Pine River pipeline crossing should be operational soon, as the line has been pressure tested and is undergoing its final fittings. We've marginally tweaked well timing in our model, which has shifted production between quarters but left our average unchanged in 2016. A now higher implied exit rate in Q4/16E marginally lifts our forecast 2017 volumes," said the broker.