Argex Titanium - Byron Analyst Increases BUY target to $3.50
posted on
Oct 10, 2013 05:13PM
Resource projects cover more than 1,713 km2 in three provinces at various stages, including the following: hematite magnetite iron formations, titaniferous magnetite & hematite, nickel/copper/PGM, chromite, Volcanogenic Massive and gold.
Argex Titanium Inc.
RGX - TSX
Shares issued: 132 million
Shares fully diluted: ~ 153.8 million
**************************
Based on yesterday’s extremely positive feasibility study news, Jon Hykawy, Head of Global Research, for Byron Capital issued an update to clients this morning. Mr. Hykawy bumped his SPECULATIVE BUY target on Argex to a full BUY recommendation. He also raised his target price to $3.50 from $3.00.
Here is a copy of the Argex report:
Robust Economic Feasibility Bodes Well
From the press release, assuming a 25 year project life and 50,000 tpa annual production, Genivar assumes roughly a $3,500/tonne pigment price over the project life, along with $454 of by-product credit per tonne of TiO2 produced. Opex is roughly $1,483 per tonne of TiO2 produced, or $1,030 per tonne of TiO2 less by-product credits. For purposes of our modeling, we have assumed 2% inflation on the opex, a flat $3,500/tonne TiO2 price, and an increase to 100,000 tpa capacity in 2017 that will require an additional $120 million capital expenditure. We admit that we have made the completely unrealistic assumption that the company will not expand beyond an initial, very successful 100,000 tpa plant. Our model also incorporates a 14% discount rate, owing to both remaining technical and financing risk, along with an 8x terminal multiple in 2023.
Jon Hykawy, Ph.D., MBA
Head of Global Research
Clean Technologies and Materials Analyst
For a full version of this report, please click on the link below:
Argex Titanium Inc. - Robust Economic Feasibility Bodes Well