Arbuthnot Securities issued a note on Caledon Resources PLC (AIM: CDN), reiterating its ‘Strong Buy’ recommendation and 80 pence target price, after the group announced production figures for the second quarter and raised the full-year forecast for production at the Cook mine.
“Production figures for the quarter to June were slightly ahead of our estimates, and we are glad to see no surprises,” the broker said, calling the new forecast for the Cook mine “very positive news”.
It noted that the strategic review process for the potential sale of the company is stated to be ongoing, with the company currently being involved in discussions with a number of parties. As a result, the company advises that shareholders should take no action at this time. “Does this suggest the company is close to a deal?” Arbuthnot asked.
“With the prospects of a sale getting nearer and the large resource base at Minyango not reflected in the price, we reiterate our Strong Buy recommendation and 80p target price, although it may be a bumpy ride if negotiations on the sale do not go as planned, or if an 80p sale price is not secured,” it added.
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