Canaccord reiterates 'hold' on KAZ Minerals

10th Aug 2016 09:21

(ShareCast News) - Canaccord Genuity on Wednesday reiterated a 'hold' rating on KAZ Minerals but raised its target price to 155p from 130p."While our main concern on KAZ remains the weak copper price hindering the company's debt pay-down plans as it completes its growth projects, the company has received help from its non-copper streams in the first half," Canaccord said."Pricing and production of both gold and silver have beat our expectations so far this year, along with pricing for zinc."In last month's second quarter production report, KAZ reported strong incremental volumes in gold from the Bozymchak and Bozshakol prospects.Canaccord said KAZ produced nearly twice the level of gold bar equivalent than it had anticipated, while silver production also beat by 8%.The broker also highlighted KAZ's statement that it could now meet or exceed the top end of gold production guidance from the East Region and Bozymchak of 40-50,000 ounces. Canaccord expected 58,000 ounces."However, we are still cautious on KAZ heading into the second half. Execution risks at Bozshakol and eventually Aktogay remain our primary concern.""East Region gross cash costs will also be in focus at the half-year stage with guidance at $200-220 per pound for 2016. "Canaccord added: "The incremental cash flow from by-product contributions bumps our valuation on the stock up by 19% to 155p/share. With KAZ trading within 5% of our revised share price, we maintain our 'hold' rating "Shares rose 0.06% to 159.50p at 1054 BST.