Dahlman & Rose Reiterates Buy Rating on Avalon Rare Metals

Dahlman & Rose is out with a research report this afternoon, where it reiterates its Buy rating on Avalon Rare Metals (AMEX: AVL); it has a $15.00 price target on the stock. The DR analysts cited a recent Prefeasibility Study that shows improved economics for the Nechalacho deposit at Thor Lake. Mine life was extended from 18 years to 20 years, and production is expected to be at 2,000 tons per day beginning in Year Two. The initial study called for a four-year ramp-up period to get to 2,000 tpd. Operating costs per ton were revised slightly higher, to $269/mt from $267/mt, and overall project costs increased by $2 MM to $902 MM. As for valuation, the analysts remarked, “We remain comfortable with our $15 price target, which is based on a NAV analysis, and we will further review the updated study when it is released on SEDAR in 45 days.”