CIBC Trims Price Target, EPS Estimates On Mirabela Nickel
Tuesday, January 24, 2022 11:14 AM



CIBC World Markets Inc. trimmed its price target on Mirabela Nickel Ltd. (TSX:MNB.TO) (ASX: MNB) to C$1.75 from C$2.20, following the mineral resource company's operating update.

Alec Kodatsky, an analyst at CIBC, maintained his "Sector Performer" rating on the stock and he expects persistent high costs and recovery challenges to remain a headwind for MNB shares.  

He said the Australia-based company's solid fourth quarter operations was overshadowed by high costs and slower improvement in recoveries over 2012/13.

Kodatsky widened his 2011 loss per share estimate to 9 Australian cents from 5 cents and cut 2012 EPS estimate to 3 cents from 14 cents.

"Q4 nickel in concentrate production totaled ~5kt, up 9% Q/Q and in line with our est. Cash costs of US$7.42/lb. were well above our US$6.01/lb. estimate; despite recent operating gains, the long-term profitability outlook at Santa Rita now appears linked to the success of cost containment efforts," Kodatsky wrote.

The company's preliminary 2012 guidance targets nickel production of 20kt-22kt, and for cash costs to decline to ~US$6/lb. by the end of the year. Kodatsky said while nickel production guidance is in line with his prevailing estimates, cash costs appear set to remain much higher, for much longer, than he had expected.

On the Toronto Stock Exchange, the stock dropped 13.2 percent to trade at $1.11 on Tuesday. The shares closed 13 percent lower on the Australian Stock Exchange.

 

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