Editorial Contributor
Tom Winnifrith’s Conviction Buy EMED Mining at 12p
Barring a late Spaniard in the works (like my good friend Zak Mir, I do love the poetry of John Lennon), EMED Mining is a share that, in my opinion, should double from the current 12p by Christmas. About my only concern is that Zak Mir agrees with this analysis! Notwithstanding that, EMED is my conviction buy this month. EMED’s main project is the Rio Tinto copper mine in Spain. It has peripheral assets in Cyprus and Slovakia. The latter is a 1 million ounce gold deposit which would do many of the riff raff of gold juniors on AIM proud, but for the purpose of this analysis I shall ignore both. The focus is on Spain where, for what seems like an eternity, EMED has been seeking permits to re-open this old copper mine. It was closed a couple of decades ago in an era of low copper prices when it was operating with a cost base that was simply untenable.
There is a reason that tens of thousands of young Spaniards are flocking to London and it is not the weather or a desire to interact with the domestic population to improve their Polish. There are simply no new jobs being created in Spain. Yet, the Spanish regulatory process for EMED — a large impending employer— has proved tortuous. The final permits should be forthcoming within the next two to three months, however, and this is the first catalyst that, I think, will result in a re-rating for the stock.
One would have thought that with Spanish unemployment at c30% and youth unemployment at well over 50% and rising, that the Spanish would be rushing through an opportunity to create new jobs.
EMED has already secured the equity (from copper giant Red Kite) and debt (arranged by Goldman Sachs) to spend the c$220 million needed to bring the Rio Tinto mine back to life.
March 2013
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