Berenberg has raised the price target on Ecora Resources Plc (ECOR: LN) to GBP1.50 from the previous GBP1.40 while keeping a Buy rating on the stock.
The adjustment follows the release of an updated feasibility study on the Santo Domingo project in Chile, which Ecora has a financial interest in through a 2% net smelter return royalty.
The Santo Domingo project, a copper-iron-gold venture, is managed by Capstone Copper. Ecora's royalty covers the part of the deposit with the highest copper grade, which is anticipated to be mined in the initial seven years of the project's production.
The study revealed favorable outcomes, suggesting that the project is robust financially.
The updated feasibility study indicates an after-tax net present value (NPV) of $1.7 billion for the Santo Domingo project, alongside an after-tax internal rate of return (IRR) of 24.1%, calculated with an 8% discount rate.
These figures underscore the project's economic potential and the positive impact on Ecora's valuation.
The analyst's commentary highlighted the significance of the feasibility study as a positive development for Ecora Resources. The study's findings are expected to have a direct influence on the company's financial prospects, given the royalty interest in the high-grade portion of the Santo Domingo project.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.