Undervalued DGC

ALEX TERENTIEW, Credit Suisse (01/07/2011)
"We are maintaining our rating at outperform, as well as our target price at C$40/share. Our target continues to be based on a 0.9x multiple to our NAV. We believe the recent pullback in the gold sector and Detour's current relative market valuation represents an attractive buying opportunity. At a P/NAV of 0.6x, Detour trades as one of the least expensive names in the intermediate-tier gold mining sector. Detour's share price has underperformed its intermediate peers over the past month, being down 4%, with the overall peer group being up an average of 6%.

Catalysts: DGC recently announced the signing of an Impact Benefit Agreement (IBA) with the Wahgoshig and Taykwa Tagamou First Nations, as well as its acquisition of the permit to begin construction of the transmission line and the closing of its $500M convertible note financing. We continue to expect the project to remain on track, with key catalysts including further IBA signings, permit approvals and the beginning of infrastructure construction."

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