Lundin Gold Maintained at Sector-Perform, Speculative, as it Buys Back Gold Stream; Price Target Kept at C$24.75

National Bank Financial on Thursday reiterated its sector-perform, speculative risk, rating on the shares Lundin Gold (LUG.TO) and its C$24.75 price target after the company repurchased the stream credit facility offtake for gold from its Fruta del Norte mine from Newmont ((NGT.TO) for US$330 million.

"Speaks to the strength of LUG's balance sheet and goodwill with NGT, whereby it would permit an early payback of the full amount. With this LUG becomes debt-free, with more fulsome exposure to higher gold price. Overall we ascribe a neutral bias. Total consideration of $330 mln to be paid to Newmont Corporation (NGT: TSX, Outperform, C$69.00 Target) vs. Q4/23 carrying value of $276 mln; payable in two tranches: $180 mln on closing of deal (~end June/24) and $150 mln before end of Q3/24. Cash and cash equivalents at $268 mln (as of Q4/23)," analyst Don DeMarco wrote.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)