reports
Update: Commercial production by January 2016
The Riotinto copper project achieved first concentrate production on 31 July and following a commissioning phase is expected to start commercial production in January 2016. EMED is on track to complete Phase 1 expansion to 7.5Mtpa by mid-2016 and contemplates a further upgrade to a 9.5Mtpa throughput by the end of 2016. Having updated our copper price assumptions, we revise our valuation of the company to US$326m, or 6.0p/share, using a 10% discount rate. Based on our estimates, the stock trades...
Update: Equity offering to fully fund the Rio Tinto project
EMED has completed an equity offering to fully fund the development of the Rio Tinto copper project to 7.5Mtpa and pay down debt. Following the placement, four strategic investors control 72.5% of the company. With Phase I construction 80% complete, first production is expected in H215, 5.0Mtpa capacity in Q116 and 7.5Mtpa run-rate by mid-2016. We update our valuation of the company to US$353m, or 6.5p/share on a funded basis, using a conservative long-term copper price assumption of US$2.75/lb....
Update: Production in late 2015-early 2016
Following successful completion of the permitting process at the Rio Tinto project, EMED’s focus now shifts to securing a funding package. While we have little doubt that the company will be able to raise the required funds, we note considerable progress on refurbishing the project using available equity and debt financing. We value the Rio Tinto copper project at US$262m on an NPV10 using a copper price of US$2.75/lb. Trading on a fully-funded steady-state EV/EBITDA of 3.5x, the stock looks a...
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