FP Trading Desk Blackmont lowers price target on Pan American Silver, but sees 20% upside along with Merrill Lynch Higher cost estimates at Pan American Silver Corp.’s (PAA/TSX) Manantial Espejo silver and gold project in Argentina is being blamed on increasing prices for materials, equipment and labour throughout the mining sector, according to Blackmont Capital analyst Richard Gray.
The updated capex is now $170-million from the feasibility estimate of $130-million in early 2006, he said in a note to clients, while maintaining his “buy” rating and lowering his price target on Pan American shares by $1 to $41.
The stock dipped 4.5% to $34.02 on Thursday, but Mr. Gray’s price target represents upside of roughly 20%.
The Manantial Espejo mine is expected to produced 41 million ounces of silver and 60,000 ounces of gold once in production.
Merrill Lynch analyst Michael Jalonen is almost equally bullish on Pan American Silver with a “buy” rating and a US$37.50 price target.
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