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1,467 Posts.
69
01/07/15
18:14
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DJ Broker Cheers Altona Mining's Chinese Deal -- Market Talk
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0516 GMT [Dow Jones] Credit Suisse is warming increasingly to Altona Mining
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(AOH.AU), raising its price target on the stock by 18% to A$0.26 and keeping an
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outperform call. Last week, Altona forged a joint venture agreement with Sichuan Railway
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Investment Group, which, subject to certain conditions, involves the Chinese entity
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paying US$214.5 million for a 60% interest in the undeveloped Cloncurry copper-gold
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prospect in Queensland state. That leaves Altona to contribute A$38 million towards the
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development. "This deal appears excellent for Altona," the broker says.
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"The capital required to develop the Cloncurry project was well beyond Altona's
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capacity." It adds that the combined cash input of US$252 million (329 million
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Australian dollars) exceeds the last development cost estimate because a broader
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mining-sector slowdown has shrunk labor and materials costs, while tumbling oil prices
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have cut fuel bills.
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