We think PIR is headed for a market capitalisation of about $730m in the medium term as it pushes towards production of 231kozpa Au at Fekola. With a potential 5Moz Au resource base supporting higher levels of production, PIR could join the likes of West African mid-caps such as Perseus (MC $1.1bn, 165kozpa, forecast 365kozpa) and Resolute (MC $1.2bn, 369kozpa). We initiate coverage of PIR with a Buy (Speculative) and a preliminary 12-month Target Price of $2.39/sh, subject to de-risking of Fekola via resource expansion and feasibility studies (PFS expected JunQ13). There some downside risk from political instability in Mali, but this appears to be contained and is outweighed by asset quality."
Recall their Oct preso stated TWO resource upgrades planned in 1Q13 and 3Q13.
5Moz will soon get blitzed IMO with more, much more to follow.
Quality of resource and focus of co is what impressed new, v seasoned MD.
And from BP "Potential corporate target for larger producers" adds some spice to PIR. Very real possibility IMO with Fekola shaping up nicely.
That's good enough for me.
DYOR - buy on weakness. Much more to come.
TImbogold
PIR Price at posting:
$1.64 Sentiment: Buy Disclosure: Held
