Analyst Actions: Credit Suisse Neutral on Eastern Platinum
Loss Inline with Estimates. "ELR reported a SepQ loss of C$5.0mn or C$0.01/sh. This was largely in line with both Credit Suisse and Consensus estimates of C$0.00/sh. More importantly, the company reported SepQ Cash and Short Term investments totaling C$135.6mn relative to Credit Suisse estimate of C$140mn, implying $32mn cash consumption during SepQ relative to our C$28mn forecast."
Cash Positive Until Q3 2015. "ELR continues to be in cash conservation mode, and continues to focus on cost control. With C$135.6mn in cash, and no debt; we believe ELR will remain cash positive until 2015Q3 (based on Credit Suisse' price deck); this timeline is however accelerated by 6 months on a spot scenario. Underlying cash cost have come down from C$22.7mn per quarter at the beginning of this year to C$19.3mn in the SepQ reflecting the scaled back operations at CRM. The Eastern Limb has also been shelved."
2013 Guidance. "We had hoped to receive some guidance on 2013 operating costs with these results, but it seems that this is now a 2013 event. Given the transitionary nature of this operation we do not have high confidence in our earnings forecasts."
Valuation: "No change to our C$0.35/sh target price or NEUTRAL rating."
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