Lundin Mining Back in Positive Territory, Battles to Get Back Above $4 as Credit Suisse Lwrs 2010 EPS Estimates


Lundin Mining Corp. (LUN.TO) has turned positive again, and is battling to get back above the $4 mark, as Credit Suisse lowered its 2010 EPS estimates, reflecting challenges facing Aguablanca.

Lundin hit a day high 4.06 in the opening half an hour and managed to stay in positive territory until before midday. From there it fell to a day low 3.86, before recovering ground. It looked for a while like it would stay below the $4 mark, but having reached it the stock is now battling to get back above it.

"Aguablanca production was in-line for the quarter. However, heavy rainfall in 1H10 has contributed to slope instability within the pit, with three areas identified as risk to disruption of the main ramp system. In addition, possible rolling industrial action may commence July 31st, running for five Saturdays and Mondays. As a result 2010 nickel/copper production guidance is lowered 7.5/6.5Kt (from 7.9/7.0Kt)," it said.

"Our TP of C$6.50 is based on a 70/30 weighting of 1x our NAVPS of C$6.61/share and 5.5x FY10/11 EV/EBITDA. Our FY10 EPS goes to $0.39 (from $0.32) to reflect actual 2Q10 results and weaker Eu forecast. During Q2, LUN reduced its principal balance Excess Over-run Costs ( EOC ) facility to Freeport to $189Mln (from $216Mln)."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: EOC

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