Newcrest has taken a 10% placement worth $10.7m in copper-gold explorer SolGold primarily to advance exploration at Cascabel, Ecuador. This was the first of the company’s early exploration joint ventures that appeared to have compelling strategic potential, Credit Suisse notes.
Credit Suisse believes Newcrest must assess the doubling in the cost of its "risk money" investment this time into a high potential, albeit still early stage, opportunity. Credit Suisse retains an Underperform rating and $19.20 target.
Target price is $19.20.Current Price is $22.41. Difference: ($3.21) – (brackets indicate current price is over target). If NCM meets the Credit Suisse target it will return approximately -17% (excluding dividends, fees and charges – negative figures indicate an expected loss).