Canaccord Genuity lowers target price on Thor Explorations

Thor Exploration's latest set of quarterly figures showed gold production in line with prior expectations at 21,800 ounces, bringing full-year production to roughly 85,000 ounces, meeting the company's guidance. Additionally, head grades were higher than the prior quarter at 2.77 grams per tonne despite lower mined ore grades.

Berenberg said 2023 was expected to be "a difficult year" in the mine plan, but it also noted that production guidance of 95,000-100,000 ounces for 2024 had come in lower than previous estimates of approximately 105,000 ounces and all in sustaining cost guidance was higher than previous expectations of $880.0 per ounce at $1,150.0-$1,350 per ounce, prompting the adjustments in its earnings estimates and valuation.

"We note that with this year's more realistic figures, the company still trades on an FY24E EV/EBITDA of ~1x, and with a significantly lower debt repayment burden than that seen in 2022 (we expect ~US$18m in repayments this year)," said Berenberg, which reiterated its 'buy' rating on the stock.

"This sets the stage for a year where the company not only reaches a net cash position (CGe: 1H24), but we expect a significant share of the current market cap to be held in net cash by year-end (~40-50%)."

Reporting by Iain Gilbert at Sharecast.com