RBC upgraded Atalaya Mining Copper (LSE:ATYM, TSX:AYM) to Outperform and lifted its price target to 1,100p, citing an improving political backdrop for the Touro copper project and a strong balance sheet.
The target, up from 1,000p, implies about 38% upside for the miner and operator of Proyecto Riotinto copper complex in south-west Spain and is developing Touro and Masa Valverde
Analysts in the Canadian bank's London operation expect Touro’s environmental permit in the third quarter, in a note saying recent court and political developments have shifted the project materially in Atalaya’s favour.
“We see asymmetric risk/reward ahead of what we expect to be an imminent permit decision,” the broker said.
Touro could double group copper-equivalent production to around 100,000 tonnes a year by 2030 and add roughly $150 million of annual free cash flow at spot prices.
Atalaya ended the second quarter with €340 million of net cash, above RBC’s €320 million estimate for Touro’s construction cost.