Based on post Resource Super Profits Tax (RSPT) modelling, this stock looks significantly undervalued.
From 'The Bull' today (Monday 24 May). With an upside to the target of 50 per cent (post RSPT modelling), one of Wilson HTM's favoured base metal stocks offering good exposure to coppers upside is Kagara (KZL). The broker likes Kagaras midpoint level cash costs on its exposure to copper and zinc concentrates - through its operating mines and concentrators in north Queensland that currently offer good margins at existing commodity prices.
Goldman Sachs expects copper prices to climb from a projected average of US$3.52 in 2010 to an average US$3.75 in 2011.
The good news for the copper price is recovering global demand in the face of a depletion of inventories.
According to Hartley's Muir, what makes the medium to long-term outlook for copper even more favourable is the limited potential of new mines coming on line any time soon.
Wilson HTM BUY Recommendations KZL - Kagara Current Share Price 55 cents Target Share Price $1.09
Gw
KZL Price at posting:
55.0¢ Sentiment: LT Buy Disclosure: Held
