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Investing.com - RBC Capital upgraded St. Barbara Ltd. (ASX:SBM) (OTC:STBMF) from Sector Perform to Outperform and raised its price target to AUD0.95 from AUD0.75, citing potential value from the Simberi Sulphide project.
The upgrade represents an implied upside of approximately 61% for the gold mining company’s shares. RBC Capital noted that St. Barbara’s considerable latent value could soon be unlocked through several catalysts, including a tax dispute resolution and mining license decision.
The firm’s net asset value (NAV) estimate for St. Barbara stands at AUD1.6 billion or AUD0.94 per share, calculated using a 12% real discount rate and factoring in an estimated AUD200 million capital raise. At current spot prices, RBC values the company at approximately AUD2.8 billion or AUD1.65 per share.
RBC Capital highlighted additional upside potential from extending the Simberi mine life beyond the current 2.6 million ounce Reserve toward the 4.9 million ounce Resource. The firm also mentioned that Atlantic value could increase through permitting progress.
The research note maintained a Speculative Risk rating on St. Barbara stock, reflecting the uncertainty around the upcoming study and final investment decision for the Simberi Sulphide project.
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