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<<-- =DJ Amerigo's "Advancement" Toward Candente "Positive": R. James --
TORONTO (Dow Jones)--Raymond James raised its rating on Vancouver junior
mining company Amerigo Resources Ltd. (ARG.T) to strong buy from outperform to
reflect an investment in Candente Resource Corp. (DNT.T) and recent share-price
weakness triggered by fears of high long-term electricity prices in Chile.
Analyst Bart Jaworski said in a report that, while the electricity price fears
are "fully justified," he believes Chile's Aysen hydroelectric projects and new
liquefied natural gas, or LNG, regasification terminal should offset shortfalls
of an Argentinean gas supply.
Amerigo produces copper and molybdenum at its Minera Valle Central operations
in Chile.
Last Thursday, Amerigo said it subscribed for a large portion of a C$17
million private placement by Candente, bringing its total holding in Candente to
9.6% on an undiluted basis, the analyst said. Further to the investment, Klaus
Zeitler, Amerigo's president, will get a seat on Candente's board.
Raymond James views Amerigo's "advancement" toward Candente as potentially
"very positive." The investment appears to be similar to Amerigo's investment in
Chariot Resources Ltd. (CHD.T) last February, which Raymond James believes was
intended to lead to a merger, Jaworski said. In this case, however, the link
appears to be stronger due to Amerigo's board representation, he noted.
Candente, also of Vancouver, explores for minerals in Peru and Mexico.
Raymond James maintained its C$3.50 target price on Amerigo. The stock is
trading up 2% at C$2.54 in Toronto Monday.
Ruston Goepel, who is an officer and director of Raymond James Ltd. or its
affiliates, serves as a director of Amerigo.
Jaworski doesn't own Amerigo stock.
Company Web Site: amerigoresources.com |
