Sandfire Resources could become a copper miner with annual output of 300,000 tons if it successfully bids for closely held Khoemacau Mining, UBS says. Media reports suggest Khoemacau's private-equity owners are considering a sale of the Botswana-focused company, with South32 also speculated as a potential bidder. Sandfire already owns the Motheo copper project in the southern African nation. "Questions remain around price and ability to fund such an acquisition, but the attraction of locking up the entire belt presents plenty of strategic appeal including synergies in an asset base that is becoming increasingly scarce," says UBS analyst Levi Spry in a note. ([email protected]; @dwinningWSJ)
0031 GMT - Sandfire Resources gets a new bull in UBS, despite near-term risks to copper prices. In a note, analyst Levi Spry says the stock has fallen far enough even as it pares expectations around the rampup of Sandfire's Matsa project in Spain. "Given the scarcity of options (especially on the ASX) in copper we are increasingly attracted to Sandfire at these levels," UBS says, moving to a buy call, from neutral. "We do remain cautious on copper in the very short term but continue to build conviction for higher prices into the medium and long term." Operationally, UBS expects Matsa's performance to be steady while early feedback regarding the Motheo project in Botswana is that is it is off to a good start. ([email protected]; @dwinningWSJ)
CBE Price at posting:
8.0¢ Sentiment: Buy Disclosure: Held
