Red Back Mining Inc. was upgraded from Neutral to Outperform by Credit Suisse in anticipation of reserve increases at its Tasiast mine in Mauritania and Chirano in Ghana. Analyst Anita Soni also expects a higher level of dump and heap leaching at Tasiast.
Her target price on Red Back shares climbs from $19.50 to $26, representing upside of approximately 28%.
Ms. Soni now uses a 1.7x target price to net asset value multiple, which she revised upward to reflect expected M&A speculation surrounding Red Back given Barrick Gold Corp.’s plans to spin out 25% of its African assets.
African Barrick Gold is set to be used as a growth vehicle via acquisition.