Beacon Hill Resources’ (LON:BHR) interim results prompted Canaccord Genuity to repeat its ‘buy’ rating and 7p a share price target for the Mozambique-focused coal miner.
The figures, largely academic for a junior at this stage of its growth cycle, were slightly better than expected, the broker said.
Looking at its funding needs Canaccord estimates BHR will require US$11.5mln for phase 2C of the Minas Moatize development.
It has already secured access to the rail line that will take the coal to the coast for export, so the foundations are in place to transform BHR into a producing, cash generative miner.
“Mining and processing activity recommenced in May and ramp up continues to progress in the current half,” added Canaccord.
“With the delivery of the first rolling stock expected in the third to fourth quarter, the company should be in a position to commence transportation and coal sales during fourth quarter of the year.
“This should help secure cash flows, easing funding needs.”
The broker expects BHR to sell around 115,000 tonnes of coal in the second half, including the volumes stockpiled in the first six months.
The shares are changing hands for 2.41p (for a rise of 5% on the day), but are trading at around a third of the Canaccord valuation.