Scotia Capital said Wednesday it is expanding its sell thesis and lowering its stock price target for Probe Mines Ltd.
, Stock Forum
Scotia analyst Mike Hocking has dropped his stock price target to 50 cents from $1.30. “We maintain our sector underperform rating,’’ he said in a research report.
The move comes after Probe released an initial indicated underground resource estimate for the Borden project in Ontario of 1.6 million ounces gold at a grade of 5.39 grams per tonne.
Traders responded by sending the shares down 11% to $2.45 Wednesday, leaving a market cap of $187.1 million, based on 76.4 million shares outstanding. The 52-week range is $3.95 and $1.47.
Hocking went on to explain that Probe shares were purchased because investors thought the company might define a high-grade underground deposit at its Borden project.
“It now appears that Probe has outlined a moderate-grade deposit at an orientation that is awkward for efficient mining,’’ he said.
“We recommend that clients sell their position in Probe Mines.’’