Thursday, November 4, 2010

Taseko (Amex:TGB) Loses Prosperity Mine Battle

Taseko Mines (Amex:TGB) got hit hard when the news came out they were denied permission to go forward with their Prosperity Mine by the Canadian government.

Cannacord Genuity downgraded them, as well as others, almost immediately afterward, lowering them from "Buy" to "Hold."

"We are downgrading our rating and lowering our 12-month target to C$5.25/share following the Federal Government’s decision to deny environmental approval for the company’s proposed Prosperity coppergold project in B.C. Our revised C$5.25 target is based on an unchanged 4.0x our 2011E EV/EBITDA (C$4.62) plus a substantially reduced in-situ value for Prosperity of C$0.59 (previously C$2.21), which reflects a markedly reduced probability weighting of only 20% (previously 75%). While we are lowering our rating to HOLD, we anticipate the shares to open sharply down on Wednesday, November 3, which could present a buying opportunity if the shares fall materially below C$5.00, in our opinion."

Taseko closed in New York at $4.91, dropping $1.57, or 24.23 percent. Canaccord dropped their price target on Taseko from C$6.85 to C$5.25.

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