Metro Mining's Share-Price Weakness Creates Buying Opportunity

Dow Jones10-13 05:55

2155 GMT - Metro Mining's production setback is disappointing, but Shaw & Partners says the investment case is intact. Metro Mining shipped 659,000 tons of bauxite last month. That was about 200,000 less than expected. The difference resulted from a channel collapse that constrained barge capacity. Analyst Andrew Hines now expects Metro Mining to ship 6.2 million tons of bauxite this year. That's below current guidance, which is likely to be downgraded. Still, Shaw views weakness in Metro Mining's share price as a buying opportunity. "Metro Mining is profitable, generating free cash with a strong balance sheet and will finish the year with a cash balance of A$60 million-A$70 million," says Shaw. Its price target falls 13% to A$2.60/share. Metro Mining ended Monday at A$0.88.

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