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Risk Warning
21/06/2011
Shares in Petropavlovsk (POG.L) gain 6.4 percent, the third-top FTSE 250 .FTMC riser, as the Russian miner says, in an update, that it will not need to tap the market for funds to complete ambitious growth plans, and it expects to meet its 2011 production target.
Fears Petropavlovsk could need to turn to the market and worries already rising costs could escalate further have contributed to a drop in the miner's share price, down almost 38 percent so far this year.
"The update today, and reaffirmation from Chairman Peter Hambro that the miner is on target to deliver the base-case production scenario given to the market at the start of the year should now put a floor under the share price," says Richard Curr, head of dealing at Prime Markets.
"Added to this, with an EPS of just 27 times earnings, the gold miner is now trading at a significant discount to it's peers, something we believe the markets will latch onto sooner rather than later," Curr adds.
Prime Markets rate Petropavlovsk shares as a buy, with an initial target of 732 pence, followed by the current 50-day moving average level at 813 pence in the next 4-6 weeks.
Securities and Derivatives markets may be subject to rapid and unexpected price movements and past performance is not necessarily a guide to future performance. Trading in these markets is generally considered to be suitable only for the more experienced investor as it carries a high degree of risk. An investor may not receive back the amount of their original investment and in certain circumstances may be liable for a sum that is greater than their original investment. If in any doubt, please seek independent financial advice.