In a report released today, Andrew Mikitchook from BMO Capital maintained a Buy rating on Wallbridge Mng Co (WM – Research Report), with a price target of C$0.20.
Andrew Mikitchook has given his Buy rating due to a combination of factors related to Wallbridge Mining Company’s updated Preliminary Economic Assessment (PEA) for its Fenelon Gold project. The revised PEA outlines a more manageable mine plan with a production capacity of 3,000 tons per day, yielding an average of 107,000 ounces of gold annually over a 16-year life of mine, at an all-in sustaining cost of US$851 per ounce. This updated plan reduces both capital and operating expenditures while incorporating conservative development assumptions, which highlights the economic viability of the Fenelon project with potential for future expansion.
Additionally, the updated PEA includes a dry stack tailing system and desulphurization, reflecting a more environmentally conscious approach to tailings management. Despite the increased costs associated with these changes and the removal of a proposed shaft in favor of a decline access, the project remains attractive due to its quick payback period, especially in the first five years with an average production of 127,000 ounces per year. However, Mikitchook notes the main risk involves financing requirements to advance the project, recommending approximately $50 million for the next phase of work over two years, which is significant given the current treasury of $21 million by the end of 2024. Despite this, the potential for revaluation as the project progresses supports the Buy rating.