KCN – RBS Australia rates the stock as Buy

The broker had been anticipating a reserve increase from Kingsgate to provide a 60% increase in mine life, but the actual announcement gives the broker more confidence in its figures. The broker sees further expansion ahead.

Throw in an increase to the broker’s forecast average gold price of US$1170/oz in 2010 and forecast earnings have jumped 60% in FY11. Target rises from $9.57 to $9.94.

Sector: Materials.

Target price is $9.94.Current Price is $9.78. Difference: $0.16 – (brackets indicate current price is over target). If KCN meets the RBS Australia target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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