Andrew Breichmanas, an analyst from Stifel Nicolaus, maintained the Hold rating on Andrada Mining (ATMTF – Research Report). The associated price target is p2.50.
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Andrew Breichmanas has given his Hold rating due to a combination of factors affecting Andrada Mining’s prospects. The company recently updated its mineral resource estimate for the V1V2 pegmatite at the Uis tin mine in Namibia, which showed a decrease in total resource tonnes, although there was an increase in the measured and indicated categories. Despite the improvement in lithium oxide grades, which could potentially enhance project economics, the unclear lithium strategy and underutilized pilot plant due to weak carbonate prices cast doubt on the feasibility of production from the V1V2 pegmatite.
Furthermore, the current tin operations are just about breaking even at existing prices, factoring in corporate overheads. Breichmanas’s valuation was originally supported by a significant plant expansion which aimed to establish by-product revenue streams and achieve economies of scale. However, the uncertainty surrounding the execution of this strategy led to the removal of the expansion from estimates, subsequently reducing the target price to 2.5p and resulting in a Hold rating for the stock.
ATMTF’s price has also changed moderately for the past six months – from $0.042 to $0.029, which is a -30.95% drop .