So let's see what CIBC thinks of Fortuna Silver (FVI.to) all of a sudden:
- As of March 2, we are initiating coverage of Fortuna Silver with a Sector Outperformer rating and a 12- to 18-month price target of C$3.75, which is based on a 2011E P/CF multiple of 10x and a P/NAV multiple of 1.7x. Our multiples reflect excellent growth tempered by the stature of the company.
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- We believe Fortuna has one of the best operations teams in the junior silver producer space, which is evident by unit cost control at Caylloma and the free cash flow generation over the past three years.
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- In 2010, we believe that production growth will trump almost all other valuations and that Fortuna will deliver this growth with the commissioning of the San Jose project, which is expected to be in commercial production in late 2011.
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- Flexibility and exploration upside at Caylloma, combined with additional precious metals revenue from San Jose, give Fortuna the ability to match production with prevailing metal prices and ensure high operating margins into the future.
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So nice of them to join the party. Get the full analysis as a PDF download from
this link right here.