Broker snap: Galvan labels Fresnillo as a 'buy'

22nd Aug 2012 11:54

Gold and silver miner Fresnillo is 'well-placed for recovery', that's according to Galvan Research and Trading, which has labelled the stock as a 'buy'.The group reported record levels of gold output in the second quarter while silver production increased quarter-on-quarter, it was announced last month. The group as a whole is on track to achieve the 2012 production target of 460,000 ounces of gold. "Fresnillo's bumper production levels look to have been sufficient to ride out the post September decline in precious metals prices, placing the miner a strong position to take advantage of any central bank stimulus-based rebound," said Andrew Gibson, Galvan's head of research."This fundamental improvement flips the May 'sell' stance at Galvan Research, particularly as Fresnillo shares have been dragged higher with the stock market as a whole."While there has been no end of day close back below the 50-day moving average at 1,473p, the broker now sees upside for the stock towards the 200-day moving average now at 1,603p.BC