Broker Roundup: Kefi Minerals, Petropavlovsk, Solomon Gold, Valiant Petroleum, Xcite Energy, Charter International, ZincOx Resources


Broker FoxDavies retains its "hold" recommendation on Kefi Minerals (LON:KEFI) after the firm's long-awaited award of its first exploration licence in Saudi Arabia

The licence, which was granted to KEFI’s Gold & Minerals (G&M) joint venture, is for the Selib North project in a highly prospective part of the Arabian shield.

The broker said it should be noted that this was only the granting of a licence and "although the ground appears to be prospective, only very limited exploration work has been conducted to date".

"There is certainly no guarantee of an economic prospect at this early stage, but at least this means KEFI can start to climb the exploration ladder to see where it may lead," it said.

Meanwhile Evolution Securities said today's statement from  Petropavlovsk (LON:POG) - one of the largest gold miners in Russia - was “very positive and demonstrated the progress which the firm, has made in many areas of its business.

The broker reiterated its ‘buy’ recommendation and 1520p target price.

Solomon Gold's (LON:SOLG) news that it had increased the inferred gold resource estimate at its Rannes project in Queensland, Australia, by 34 percent - taking it to 534,000 ounces of contained gold was welcomed warmly by house broker Fairfax.

"Investors may be forgiven for a degree of frustration due to the delay in publishing the resource and associated update. However, the new gold resource and realisation of the strong silver credit should give investors good reason to support the shares from here," said the broker, which recommended a "buy".

Broker Morgan Stanley believes markdowns on North Sea oil and gas companies and fears over a tax increase have been overdone.

In a  wide ranging overview of the whole sector the broker notes that the concerns have led to companies focused on the region to underperform the Brent index by 40 percent and the FTSE 250 by 15 percent so far in 2011.

Casting their eye across the North Sea players offering upside potential, the Morgan Stanley analysts plump for Valiant Petroleum (LON:VPP) and Xcite Energy (LON:XEL) as top picks.

Both companies “offer attractive valuations combined with near-term production growth and potentially transformational exploration catalysts”, they say.

The broker currently has an  ‘overweight’ stance on Xcite, with a 315 pence price target, and for Valiant, it rates the stock as ‘over-weight’ with a price target of 765 pence.

Elswehere Brokers Citi, Credit Suisse and Panmure Gordon said they have reduced their price targets for engineering company Charter International (LON:CHTR) on the back of yesterday’s profit warning, which wiped out a quarter of the stock’s value.

Analyst at Credit Suisse Jonathan Hurn slashed his target price for the stock from 815 pence to 645 pence, while leaving Charter’s “neutral” rating unchanged.

Panmure Gordon rated the firm a "buy"  and slashed Charter's target price from 860 pence to 655 pence in response to the profit warning.

Citi upheld its "buy" rating but reduced its price target for Charter from 1,000 to 800 pence, which, however, still represents a significant premium to yesterday's closing price.

Analysts following ZincOx Resources (LON:ZOX) described news that its Korean recycling plant remains on budget and on schedule for completion in the first quarter of next year as "encouraging".

House broker Ambrian Partners upped its target price for the stock to 112 pence each for the firm's shares (from 104 pence).

“It is highly encouraging to see that the company has committed 72 percent of the capital, has completed 85 percent of the civil works and is still within a one percent variance of the projected capital costs,” said its analyst Nick Mellor.

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