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On Wednesday, Scotiabank (TSX:BNS) initiated coverage on Aya Gold & Silver Inc (AYA:CN) (OTC:MYAGF), a mining company with operations in Morocco, bestowing a Sector Outperform rating. The firm has set a price target of C$19.00 for the company’s shares, signaling confidence in the miner’s prospects.
The new price target reflects a significant endorsement from Scotiabank, implying a robust upside potential based on the company’s current operations and exploration assets. The basis for the price target is a 1.30x price to net asset value (P/NAV) multiple, derived from a discounted cash flow (DCF) analysis of Aya Gold & Silver’s primary operation, the Zgounder silver mine. Additionally, the Boumadine exploration asset, also located in Morocco, contributes to the valuation.
Scotiabank’s analysis emphasizes the potential of Aya Gold & Silver’s flagship Zgounder silver mine. The mine’s performance and prospects are central to the Sector Outperform rating, indicating that the analyst expects the company to outperform the average return of other companies within the sector.
The inclusion of the Boumadine exploration asset in the valuation also suggests that Scotiabank sees further growth potential beyond the current mining operations. This exploration asset is considered an additional resource credit, adding to the overall value proposition of Aya Gold & Silver.
The initiation of coverage by Scotiabank with such a favorable outlook is a noteworthy development for Aya Gold & Silver. The company’s stock performance will be observed by investors as they consider Scotiabank’s analysis and price target in their investment decisions.
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