10:40 AM EDT, 04/29/2024 (MT Newswires) -- National Bank noted Monday that First Quantum is set to place its Ravensthorpe mine in Western Australia on Care and Maintenance amidst the "currently depressed" nickel price environment.

The bank sees the impact as Neutral, It has an Outperform rating and C$18 target on the stock.

National noted Ravensthorpe's Q1 2024 operating profit was US$(22) million and under its Base Case accounts for US$70 million (or near 0.4% of its Project NAV). It also noted operations are likely to remain shuttered until the company sees a sustainable nickel price environment closer to US$10.00 to US$12.00/lb (Q1 2024 AISC was US$12.51/lb).

National said its Outperform rating continues to take into account the recent improvement in near-term liquidity outlook which provides "sufficient runway" to monetize non-core assets like Las Cruces and sell a minority stake in the Zambian operations further supporting the long-term financial viability of the company. It added: "While there remains significant uncertainty related to restart of operations at Cobre Panama and arbitration proceedings, we believe that at current share prices the market is discounting the net recoverable value for the asset. In any event, we do not anticipate any positive headlines related to these pending negotiations until well after upcoming federal elections in Panama in May which would potentially provide further value to our Base Case assumptions."

FM currently trades at 0.99x NAV compared to National Bank peers at 1.42x as well as 7.4x EV/2024E CF (excluding any production from Cobre Panama) compared with National Bank copper peers at 7.7x and industry-leading copper producers closer to 11.4x.

National's $18.00 target remains derived from a multiple of 1.0x NAV.

Price: 17.67, Change: -0.60, Percent Change: -3.28