CIMB suspects Mount Gibson could beat shipment guidance in FY14 with the December quarter 12% higher than estimates. The broker thinks the stock is one of the safest ways to play the junior iron ore theme, given the company’s net cash position.
An increased focus on exploration and the acquisition of Shine should help extend the existing mine life. CIMB retains an Add rating and $1.20 price target.
Target price is $1.20.Current Price is $1.02. Difference: $0.18 – (brackets indicate current price is over target). If MGX meets the CIMB Securities target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).