In an Aug. 26 research note, analyst Joe Reagor indicated that ROTH Capital Partners revised its near-term estimates for Pretium Resources Inc. (PVG:TSX; PVG:NYSE) to reflect its recently reduced commodity price estimates. The changes, however, did not affect discounted cash flow enough to warrant a revised target price, so ROTH maintains its $19 per share target and its Buy rating on Pretium. The stock is currently trading at around $11.40 per share.
ROTH revised its near- and medium-term cost forecasts on various commodities because their prices have dropped recently and are expected to remain under pressure as long as the U.S. dollar remains strong.
For Q3/18, the firm changed its forecasts on these commodities:
Gold: To $1,210 per ounce ($1,210/oz) from $1,350/oz
Silver: To $15.25/oz from $17.31/oz
Lead: To $1 per pound ($1/lb) from $1.10/lb
Zinc: To $1.10/lb from $1.40/lb
Copper: To $2.75/lb from $3/lb
For Q4/18, ROTH made these changes:
Gold: To $1,225/oz from $1,300/oz
Silver: To $15.90/oz from $17.33/oz
Lead: To $1/lb from $1.10/lb
Zinc: To $1.10/lb from $1.30/lb
Copper: To $2.75/lb from $3/lb
For full-year 2019, it revised these price estimates:
Gold: To $1,288/oz from $1,500/oz
Silver: To $17.17/oz from $20/oz
Zinc: To $1.10/lb from $1.20/lb
Despite ROTH's lowered near-term projections for Pretium as a result of the decreased commodity price estimates, Reagor said the company will likely still generate enough cash to repurchase its gold stream by the end of 2018. In the meantime, however, ROTH is omitting it from its conservative model on the miner. "Instead, view the stream repurchase as upside to our valuation," he added.[NLINSERT]
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from ROTH Capital Partners, Pretium Resources Inc., Company Note, August 26, 2018
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of Pretium Resources Inc. and as such, buys and sells from customers on a principal basis.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.