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Welcome to the Crystallex HUB on AGORACOM
Crystallex International Corporation is a Canadian-based gold company with a successful record of developing and operating gold mines in Venezuela and elsewhere in South America
Message: Wellington target cut details
Crystallex Gets Wellington Tgt Cut On Higher Proj Cost View
Dow Jones Newswires - November 15, 2007 10:46 AM ET
TORONTO (Dow Jones)--With Crystallex International Corp.'s (KRY) updated mine development and future operating cost review coming in higher than expected, Wellington West Capital Markets Inc. cut its target price on the stock in half, to C$5 a share. Wellington's Catherine Gignac said in a research report Thursday that the company's capital cost estimate for its Las Cristinas gold project in Venezuela is now US$356 million, up 22% from reports issued in 2003 and 2005. Its forecasted operating costs have increased 28% to US$9.80 a metric ton, which the analyst said is in line with rising commodity and consumables prices.
"The Venezuelan government appears to support Crystallex's development of the multi-million ounce Las Cristinas Project, but has a different timeline than North American capital markets, causing share-price uncertainty and volatility," Cignac said.
The Toronto mining company said earlier this month that it expects to obtain an environmental permit for Las Cristinas soon. The permitting process has delayed the start of operations at the project for years.
Late Wednesday, Crystallex reported third-quarter results, posting a larger loss and lower revenue on a nearly 50% drop in production. The company lost US$9.3 million or 4 U.S. cents a share in its latest quarter, compared with a loss of US$8.8 million or 4 U.S. cents a year earlier. Revenue plummeted to US$2.2 million from US$9.8 million.
In Toronto Thursday, Crystallex is down 3.9% to C$2.74.
Wellington maintained its strong buy rating on the stock for risk-oriented investors, citing high gold prices, the lack of new gold development projects and the industry's need for growth and acquisition.
Wellington said its preliminary revised net present value is C$2.15 a share, while resources beyond its mine model are valued at C$2.56 a share. Wellington said no premium for growth or management is currently justified.
Wellington West doesn't have an investment-banking relationship with Crystallex and the analyst doesn't own the stock.
Company Web site: http://www.crystallex.com
-Judy McKinnon, Dow Jones NewsWires; 416-306-2100
> Dow Jones Newswires
11-15-07 1045ET
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