Equinox Gold ( NYSE: EQX ) shares wobble between modest gains and losses after RBC Capital downgraded the miner to Underperform from Sector Perform with a C$5.50 price target, cut from $8, saying the balance sheet is "at risk of a potential funding gap."
RBC analyst Wayne Lam estimated higher cost operations resulting in reduced near-term cash flow, with mine site all-in sustaining costs of $1,400/oz in Q3, "which could place pressure on the balance sheet with greater emphasis on delivering the Greenstone project on time and on budget."
"Given elevated costs across the portfolio amidst large-scale construction at Greenstone, we view potential for a funding gap of ~$125M at spot prices at our modeled 20% higher capex, which could result in further share price compression," according to Lam.
Equinox Gold ( EQX ) is "a development story and is in the high-growth stage of its corporate lifecycle," Fund Letter Stock Ideas writes in an analysis posted recently on Seeking Alpha .
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Equinox Gold cut to Sell equivalent at RBC on potential funding gap