EMED Mining’s (LON:EMED, TSE:EMD) Rio Tinto mine is an attractive and valuable asset given bullish copper prices and a dearth of new mines coming online in the near term, according to Canadian broker Paradigm Capital.
In a note to clients Paradigm analyst Jeff Woolley said he was optimistic that the Spanish regulatory authorities will ultimately approve EMED’s permitting application and this will be a significant catalyst for the shares.
“Rio Tinto is a past producing mine with low technical risk for a re‐start of operations, and substantial potential for resource and mine life expansion,” Woolley said. “These positive attributes are not fully reflected in EMED’s share price, but this is likely to change quickly pending successful completion of the mine permitting process.”
The dual-listed mine developer is working to restart a large historic copper mine in Spain. Currently much of its work is been administrative in nature and it is trying to cut through bureaucratic red-tape. Thus far this has been a complicated and protracted process.
Once operational the Rio Tinto mine is expected to produce around 37,000 tonnes of copper concentrate from 9 million tonnes of ore each year.
The importance of the permitting issue was underlined further yesterday, when EMED revealed it has found an additional mine development opportunity at the site which could enhance the Rio Tinto mine.
EMED plans to carry out further investigative work on San Dionosio, which will include a NI43-101 resource estimate as soon as it can, but this will hinge on the mine getting the Andalucian government’s seal of approval.
On the permitting issue Woolley added: “With elections pending for the Junta de Andalucia in early 2012, we believe the government will become increasingly motivated to address the permitting issues at Rio Tinto in the coming months.
“EMED’s management is optimistic that the main permits for the refurbishment of the Rio Tinto will be obtained late this year, which would allow for operations to re‐start in the second half of 2012.”
Paradigm rate EMED as a buy and it gives the Toronto listed shares a C$0.50 target price – which at the moment equates to about 31p.