The prefeasibility study has indicated that a transition to a block cave at the lower half of the Carrapateena ore body is accretive to value. Mining rates would lift to 12mtpa from 5mtpa for around $1.2-1.3bn of incremental expenditure.
First production could be in 2026. As a result, UBS upgrades valuation by 18%. A final investment decision is due in 2023.
The broker maintains a Buy rating, as OZ Minerals has numerous growth options that should be de-risked over time. Target is raised to $11.90 from $10.90.
Sector: Materials.
Target price is $11.90.Current Price is $10.68. Difference: $1.22 – (brackets indicate current price is over target). If OZL meets the UBS target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
