GBG 0.00% 2.9¢ gindalbie metals ltd

morgan stanley update -price -0.28 to 1.14

  1. 724 Posts.
    lightbulb Created with Sketch. 2

    new target $0.70 Bullish senario:1.14 Bearlish senario:0.28


    Investment Thesis
    • We believe that the market is yet to
    apply full value to GBG’s share of the
    Karara Iron Ore Project.
    • Our positive view is predicated in the
    company meeting reaching its 16Mtpa
    run rate during FY15.
    • Iron ore remains one of our key
    commodity picks despite the recent
    volatility, with prices supported by
    China’s marginal cost of production.
    Key Value Drivers
    • The company’s goal is to reach Stage
    2 production of 16Mtpa by 2015.
    Reaching this goal through on-time
    and on-budget development is key.
    • GBG is highly leveraged to iron ore
    prices, which in turn are strongly
    correlated with Chinese construction
    demand.
    Potential Catalysts
    • Stage 1 Magnetite sales due to
    commence in September 2012.
    • Additional drilling results, resource
    updates and studies from its other,
    100% owned assets.
    Risks to our Price target
    • Development risk: The project
    remains on schedule, but slippage is
    an ever present risk at this stage.
    • Currency risk: In relation to the project
    budget this is largely past, but the
    debt facility required to cover the
    overrun is still pending.
    • Commodity price risk: Once the
    project is operational it will be more
    highly levered to the iron ore price
    than most peers due to the relatively
    high production costs and the
    premium it receives to bench mark
    pricing.
 
watchlist Created with Sketch. Add GBG (ASX) to my watchlist

Currently unlisted public company.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.