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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Bearcatbob who wrote (27921)	2/14/2004 10:29:24 AM
From: Stephen O	Respond to of 39344

FIRST QUANTUM MINERALS (FM : TSX : C$16.81) – BUY - 12-MONTH TARGET PRICE: C$20.00 Greg Barnes (canaccord) Comment: For First Quantum growing copper production is the key After being restricted on First Quantum since January 21, we have updated our EPS and CFPS estimates and our target price for the company based upon our revised copper price forecast of US$1.10/pound in each of 2004 and 2005. Previously, we were forecasting copper prices of US$0.95 in 2004 and US$0.90/pound in 2005. Long term, we continue to use a US$0.90/pound copper price. We have increased our EPS and CFPS estimates for First Quantum after incorporating our higher copper price forecast into our model. First Quantum’s Kansanshi project is still under development and we expect the operation to enter production during the fourth quarter of this year and in 2005 to produce approximately 82,000 tonnes of copper (both as cathode and in concentrate). Barring any development or start-up problems at Kansanshi, we expect that First Quantum will show strong earnings and cash flow growth over the next two years. We have increased our target price to C$20.00/share based upon a 6.25 times multiple to our 2005 CFPS estimate. Our previous target price of C$15.00 was based upon a 6.5 times multiple to our earlier 2005 CFPS estimate. We believe that a 6.0 times multiple is appropriate given the growth profile, but also the development risk inherent in First Quantum. We note that our new target price is 1.3 times our net asset value. We are maintaining our BUY recommendation.