NGEx Minerals, the Basic Materials sector company, was revisited by a Wall Street analyst yesterday. Analyst Rene Cartier from BMO Capital maintained a Buy rating on the stock and has a C$20.00 price target.
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Rene Cartier has given his Buy rating due to a combination of factors that highlight the potential growth and strategic advantages of NGEx Minerals. The company’s decision to spin out NSR royalties on the Lunahuasi and Los Helados projects is a significant move that could unlock substantial value, with a base case valuation estimated between C$300-400 million. This strategic initiative not only solidifies the company’s asset base but also opens up opportunities for future financing and potential transactions, enhancing its appeal to investors.
Furthermore, the proximity of the Lunahuasi and Los Helados projects provides a strategic advantage, potentially attracting partnerships or mergers and acquisitions. The established large-scale resource at Los Helados underpins the exploration potential at Lunahuasi, offering significant optionality for future growth. Although the new spinco may not have immediate cash-flowing assets, its potential to raise capital and support future development projects within the Lundin Group adds to the long-term growth prospects of NGEx Minerals.
In another report released on July 17, Jefferies also maintained a Buy rating on the stock with a C$21.00 price target.
NGXXF’s price has also changed moderately for the past six months – from $10.320 to $13.865, which is a 34.35% increase.