Gabriel Resources Ltd. (GBU)

[amarksp]

GABRIEL RESOURCES (GBU : TSX : C$2.42) - BUY - 12-MONTH TARGET PRICE:
C$4.00
Brian Christie
Comment: Political uncertainty decreases Gabriel valuation
Recent disparaging remarks from the Romanian Prime Minister regarding the Rosia Montana project leads Gabriel to cancel a C$28 million bought deal equity financing. Gabriel will now complete a fully marketed equity deal, which will see the issuance of at least ten million shares. In the short-term, we believe that the shares will be under pressure. We have
further reduced our equity pricing in our model, which results in a decrease in our NAV to C$4.18 from C$4.36 per share. Until we see further clarity on the political front, we have reduced our NAV multiple from 1.3 to approximately 1.0 times. Our target price has subsequently been reduced to C$4.00 from C$5.50. We continue to like the longer-term fundamentals of the Rosia Montana project and the shares therefore remain a BUY.

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FWIW, have sold 85% of my Gabriel, looking to reenter upon next private placement, Gabriel will have to raise at least another US$20M, IMO, this year...