Analyst Ralph M. Profiti of Stifel Nicolaus maintained a Hold rating on Prime Mining, reducing the price target to C$2.57.
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Ralph M. Profiti has given his Hold rating due to a combination of factors surrounding the recent acquisition agreement between Torex Gold and Prime Mining. The offer from Torex provides Prime shareholders with a premium over recent trading prices and a stake in the combined entity, which includes access to Torex’s Morelos Complex. This strategic consolidation is seen as beneficial, offering enhanced financial strength and market visibility.
However, the Hold rating reflects the current valuation of Prime Mining’s shares in light of the acquisition offer, which is pegged at C$2.57 per share. While the deal offers potential benefits, such as de-risking the Los Reyes project through Torex’s expertise, the current share price already reflects this value, leading to a neutral stance on further price appreciation. Additionally, the security situation in the Los Reyes area and the paused drilling activities contribute to a cautious outlook, justifying the Hold rating.