Klondex Mines (TSE:KDX) was reiterated a Buy while its share price target was increased to C$5.75 per share from C$5.25 by brokers at Rodman & Renshaw on Tuesday.
The share price upgrade follows news on Monday that Klondex Mines announced a positive production decision for its True North Gold mine. Read more.
“In line with our prior expectations, Klondex has chosen to move forward with True North while also announcing preliminary estimated operating parameters for the mine. The firm envisions annual throughput of 600-1,000 tpd, resulting in production of 45,000-65,000 ounces of gold per annum,” Rodman said in a note.
But the analysts added that the costs will be low in relation to what mining can yield.
“Given that True North was a past producing mine, the project hosts a suite of infrastructure. In short, we feel this limits capital costs. The firm expects initial capital costs of C$15-C$25mln, which we view as minor given the anticipated production profile of the site. Furthermore, all-in sustaining (AISC) at the site are expected average C$950-C$1,050 per ounce of gold—further adding to Klondex’s low-cost production profile.”
While the firm has successfully reached a production decision at True North, Klondex recently announced an agreement to acquire the Hollister mine and the Esmeralda mine and mill from Waterton for total consideration of approximately $90mln.
Rodman noted developments favourably.
“The asset was purchased by Waterton in 2013 following Great Basin Gold’s bankruptcy, the previous owner of Hollister. While potential economics of operating the mine have yet to be released, we note Klondex’s expertise with respect to purchasing underperforming assets and instituting successful turnarounds,” the broker said.
Elsewhere, UnitedHealth Group (NYSE:UNH) was rated as a "top pick" by brokers at Jefferies because of attractive valuation and a best-in-class management team.
United shares were own 1% at $134.20.
Meanwhile, it was less happy news for Anthem (NYSE:ANTM) in the ratings arena. In that same report from Jefferies, Anthem was downgraded to "hold" from "buy." Jefferies cited concerns over expenses and a lack of positive catalysts for the health insurer.
Anthem shares were down 2.9% at $124.90 on Tuesday.