Lundin Mining (Buy, TP: SEK68.00) - Sticking to positive long-term view
Due to a power outage in Chapada, processing activities have been interrupted, affecting our 2020e EBITDA by 4%. However, we still believe the long-term outlook is appealing with volume growth to support earnings up until 2022e, a well-capitalised asset base generating a FCF yield >10% in 2021e, and an end-2020e net cash position that could be deployed on increased shareholder returns or M&A. We have raised our 2021–2022e EBITDA on marked-to-market metal prices and FX, and have lifted our target price to SEK68 (65). We reiterate our BUY.Lundin Mining is a holding company. Through its subsidiaries, Co. is engaged in the exploration for minerals and the production of base metals, with a focus on zinc.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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