equinox a takeover candidate wi

FP Trading Desk
Equinox a takeover candidate with copper and uranium

Equinox Minerals Ltd.’s (EQN/TSX) 100% owned Lumwana copper project in Zambia is considered a world-class asset. With production expected in the second quarter of 2008, this makes Equinox a potential takeover target.

Late-stage copper producers present an opportunity for their more senior counterparts looking to boost production quickly and effectively. Meanwhile, many juniors have the cash to make such an acquisition in an attempt to reach the next tier.

Given its politically stable location in Africa, full permits and minimal technological risks, UBS analyst Alec Kodatsky has initiated coverage on Equinox with a “buy” rating and $4.75 price target.

While annual copper-in-concentrate production of 169,000 tonnes is expected in the first six years of the mine’s 37-year expected lifespan, Mr. Kodatsky also points out that Lumwana also contains a uranium resource of 21.8 million pounds of U3O8. A feasibility study for a uranium facility is expected to be completed in the first quarter of 2008.

“Equinox owns a number of highly prospective exploration properties in close proximity to the Lumwana plant site, which could justify an eventual expansion of the existing operation,” he said in a research report.

However, the biggest challenge Equinox may face is limited smelting capacity in central Africa.

Jonathan Ratner