Precious metal junior Mandalay Resources Corp (TSE:MND) has received a 'buy' rating from Desjardins analyst Michael Parkin, who has upgraded the junior miner's shares from a 'hold'.
The Globe and Mail in its 'Eye On Equities' column has reported Parkin saying in a note that Mandalay announced first quarter production of 32,500 ounces of gold equivalent ounces (GEO), which missed Desjardins previous estimate of 37,700 GEO.
"The 1Q production result represents 22 per cent of the mid-point of the company's annual guidance of 138–163,000 GEO; however, we expect higher production results in subsequent quarters this year, as does management," says Parkin.
He reckons Mandalay will achieve its guidance with Desjardins estimate of 150,400 gold equivalent ounces (GEO) at total cash costs of U$757 per gold equivalent ounce.
Mr Parkin lowered his target price to 85 cents from 95 cents, while consensus is for 83 cents.
Last week, Mandalay said that in the three months to end March it produced 32,481 ounces of gold equivalent from the three mines - Cerro Bayo, Bjorkdal and Costerfield - down from 39,965 ounces in the same three months in 2016.
In the previous quarter (to end December), it produced 31,293 ounces.
Sales of gold equivalent ounces came in at 34,801 ounces in the latest quarter, down from 40,808 ounces in the first quarter of 2016.