www.baterogold.com
Batero Gold Corporation is a Canada-based exploration company engaged in the exploration and development of mineral property interest in Colombia. The project has an Initial 43-101 resource estimate of 3.5 M ounce indicated gold and 2.6 M ounce inferred gold open pit resource estimate based on a 0.16 g/t cut off. 70 % of the project remains unexplored.
Raymond James covers Colombia-focused Batero, Continental Gold and Galway Resources
Capital markets firm Raymond James has started coverage on three Colombia-focused companies: Batero Gold (CVE:BAT), Continental Gold (TSE:CNL) and Galway Resources (CVE:GWY).
According to a World Bank report, Colombia is now the third-friendliest business destination in Latin America with an economic growth rate between 2.5 and 6.9 percent in real terms from 2002 to 2008.
Forbes ranks Colombia as the fifth-best country globally, and the best country in Latin America in terms of investor protection. In 2010, the IMF ranked Colombia as the fifth-largest GDP in Latin America and is estimated in fourth position for 2011, surpassing oil-rich Venezuela.
Raymond James started coverage on Batero Gold with a "strong buy" and a $3.60 target price.
Batero is a junior gold-copper exploration and development company focused on the 100 percent-owned Quinchia project in Colombia. Batero has identified three gold-copper porphyry deposits and plans to release the initial resource estimate for the Quinchia deposit in early 2012.
The capital markets firm said Batero-Quinchia has the "potential to host a large tonnage, bulk-mineable gold/copper porphyry deposit plus the potential to host higher-grade epithermal gold mineralization along the Amarilla Structural Corridor".
In a research note, analyst Gary Baschuk said: "We believe the company offers: attractive valuation, resource expansion potential, excellent exploration upside, a potential stock re-rating through project de-risking, exposure to Colombia’s improving geo-political environment, take-over potential, active news flow, and a solid experienced, management team."
Meanwhile, Continental Gold (TSE:CNL) owns the high-grade, advanced stage Buriticá vein-hosted deposit with excellent potential for expansion and for new discoveries on the property, Raymond James said.
The capital markets firm started coverage on Continental Gold with an "outperform" rating and $12.50 target price.
In the research note, the Raymond James analyst said: "We recommend investors accumulate shares of Continental on what we view as significant exploration potential growth and rapid development (de-risking) of its key asset, the 100%-owned Buriticá gold-silver-zinc project in Colombia."
Raymond James added that Continental Gold is trading at a low multiple compared to other producers and expects the high grades will lead to low cost production.
In terms of take-over potential, the equity research firm said: "The majors are actively exploring in Colombia and with roughly 3.4 million ounces at Buriticá, we believe they will be keeping a close eye on Continental as the project advances to an appropriate risk level."
Raymond James also said that Continental is wrapping up a 100,000 metre drill program and is planning a further 60,000 metres in 2012.
"We expect the increased drill density from the 2011 program to better define the block model, increasing the measured and indicated resources and leading to a Preliminary Economic Assessment by year-end 2012," the capital markets firm said.
Finally, Galway Resources' key properties are located in the California District of northeastern Colombia. The company has two key assets - the high grade Vetas underground mine, and the property intervening and along strike of La Bodega/La Mascota deposits owned by Eike Batista’s EBX.
The capital markets firm has started coverage on Galway with a "strong Buy" rating and $2.50 price target, as it recommended investors accumulate shares of Galway on "significant exploration potential" at both the California and Vetas projects and potential consolidation of the California mining camp.
In its note, Raymond James said: "From an investment perspective, we believe the company offers: attractive valuation, potential large resource, significant exploration upside, a potential stock re-rating through project de-risking, exposure to Colombia’s improving geo-political environment, take-over potential, active news flow and a solid management team."
Thursday morning, Batero Gold was trading down 0.37 percent at $2.71, Continental Gold was down 0.77 percent to $7.74 and Galway Resources was 1.82 percent lower at $1.62.
