Broker Round-up Part 2: including Condor Resources, Cluff Gold, Stellar Diamonds and North River Resources
Monday, 16 April 2012
Global mining giant Anglo American (LON:AAL) offers “long-term value” for investors, said Citigroup in a note this morning.
The US bank has upgraded the firm’s South African listing to ‘buy’ from ‘neutral’ despite Anglo’s share price falling since February. However, it maintains a ‘neutral’ rating on Anglo’s UK listing.
The UK-headquartered company, which is one of the world’s largest mining firms and is focused chiefly on its South African operations, produces iron ore and manganese, metallurgical and thermal coal, copper, nickel, platinum and diamonds.
Citigroup commented: “We believe it may be a good time to buy the stock as it may be too late when positive catalysts arise.”
The UK share price was down 0.82 per cent to 2,244p per share.
Meanwhile, the UK’s largest listed water company United Utilities (LON:UU) is still Nomura’s preferred UK water pick.
The Japanese financial firm believes the stock’s recent weakness is unjustified and maintains its positive outlook for the company.
In the last month, United has underperformed its rival Severn Trent (LON:SVT) by 2.1 per cent but the broker sees no significant change in outlook relative to other water companies.
Nomura said: “We remain buyers of UU and prefer it over SVT from here.”
It has a price target of 695p for the company against a current market price of 598.50p.
In other news, broker Investec has initiated coverage on thermal coal producer Continental Coal (LON:COOL).
The AIM-listed company has “attractive potential” according to Investec and can become a “genuine mid-tier contender”.
While current production rates stand at 1mtpa of sales, additional projects currently in development should see this rise to 4-5mtpa, said Investec.
Its asset base is located in the Ermelo region, east of Johannesburg, with two producing assets, and two further projects on the way.
Investec has initiated coverage with a price target of 18p and ‘buy’ recommendation on the stock.
Continental’s share price was down 1.96 per cent, standing at 12.50p.
Elsewhere, US firm Goldman Sachs has downgraded security company G4S (LON:GFS) to ‘sell’ from ‘neutral’, but has pushed its 12-month price target for the company up to 276p from 268p.
G4S, the world’s leading international security group, will play a major role in this summer’s London Olympics, carrying out duties such as bag and vehicle searching. The share price stood at 284.80p, up 0.46 per cent.
The broker also downgraded specialist distribution group Bunzl (LON:BNZL) to ‘sell’ from ‘neutral’.
The London-headquartered company delivers food, retail, cleaning, safety, and healthcare products in over 23 countries.
However, Goldman also upped its price target to 988p from 940p.
Central America-focused mining company Condor Resources (LON:CNR) is targeting further exploration success at its 100 per cent-owned La India gold project in Nicaragua, according to City firm Ocean Equities.
Following the latest resources update on Friday, Ocean believes the UK-based company now has the potential to support an economically viable underground operation.
The broker said: “Our view is that the La India system has potential far beyond its historic resource bounds. Condor now has a great opportunity to build on a strong knowledge base to add to the ounces already within the resource estimate.”
Also in gold today, West Africa-focused company Cluff Gold (LON:CLF) released positive annual results.
The company, with assets in Burkina Faso, Sierra Leone and the Ivory Coast, announced a 92 per cent increase in earnings, driven by gold prices and higher output, as well as net cash of $28.9 million.
Broker Fairfax believes that the stock has suffered from political issues, including the coup in Mali and the demarcation of a new, unrecognised Tuareg. However, Tuareg fighters have now declared a ceasefire in Mali.
“Cluff appears to be working well in Burkina Faso,” Fairfax said.
Shares in Cluff Gold rose to highs of nearly 83p today.
Another West African-focused company Stellar Diamonds (LON:STEL) released final results from bulk sampling last week from its Lion-5 Kimberlite Dyke in Sierra Leone.
The diamond company is now planning a resource drilling campaign on the project in addition to the nearby Pol-K kimberlite from which Stellar will establish a maiden resource for the Kono project, says broker Daniel Stewart.
Meanwhile, mineral exploration and development company North River Resources (LON:NRRP) reported positive flotation results following the de-watering of its Namib lead and zinc mine.
Broker Fairfax said that the de-watering represents “an important step forward” for the UK-based company.