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Platinum Group Metals Ltd. Message Board

  • hockeyguy548 hockeyguy548 Nov 1, 2012 2:36 AM Flag

    Credit Suisse North America: Neutral rating for Platinum Group Metals Ltd. and $1.40 target price

    According to Credit Suisse North America:

    Platinum Group Metals Ltd. (PTM.TO)

    NEUTRAL [V]

    CP: C$ 1.02

    TP: C$ 1.40

    CAP: C$ 181.1m

    First Impressions: Project Financing Progresses, and Construction Update is Encouraging

    - PTM.TO provides an update on their project debt financing and the construction schedule at the flagship WBJV1 project, both of which are positive in our view.

    - Project Finance: The highly anticipated (and long delayed) C$260mn senior debt facility has advanced through technical, financial and legal due diligence. There are still some incomplete steps before finalization and draw-down, but relative to the milestones that are now apparently complete, we consider these minor. Our biggest doubt on this milestone had been the financial due diligence by the lenders in the context of lower commodity price forecasts and higher costs.

    - Construction progress: Although initially development rates on the mine access ramp were below expectation, these have since accelerated to be in excess of 100 linear meters per month, which is ahead of the target rate. Completion of this ramp and intercept of the reef is on the critical path for this project, so it is again encouraging to hear that this is progressing well.

    - We updated our PGM Sector earnings earlier this week. We have a C$1.92/sh NAV for PTM.TO but after applying a 0.7x risk weighting to WBJV1, this decreases to C$1.42/sh, which is how we support our target price. As the project is derisked, the 0.7x risk multiple will continue to be monitored.

 
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