Adopting a more conservative production ramp-up profile, we have revised down our FY13E silver production by 17% to 1,353koz from our previous forecast of 1,631koz. As a result, we have lowered our NPV/PER-weighted target price by 13% to A$0.67 (from A$0.77 previously). At the current share price of A$0.33 we calculate that the stock offers significant upside potential. We maintain a Speculative Buy recommendation; investors should note the high risk profile associated with the business, particularly, the sensitivity of the group’s near-term cash-flow to operating factors and the silver price.
CCU Price at posting:
31.1¢ Sentiment: ST Buy Disclosure: Not Held
