BMCE capital recommends the relief of the title SM Imitate

Investors, if you hold SM Imiter (SMI) securities, lighten your portfolio. In any case, this is the recommendation of BMCE Capital Global Research (BKGR). According to its analysts, Managem’s silver subsidiary should only partially benefit from the rise in silver prices, which represents a safe haven in an uncertain context, given the drop in mine grades. BKGR, which forecasts the stock at 1,438 DH, specifies that Imiter’s operational difficulties should continue to impact the company’s margins following the increase in cash-costs. The company has also proceeded with the construction of a quarry to recover old silver piles, in order to compensate for this loss in grade. However, notes BKGR, “this new project should only partially offset the production replica and the return to normal operation would only be possible in the event of a major discovery of a new deposit”. BKGR does, however, highlight four strengths for the title.

First, the extension of the installations for the treatment of the dykes makes it possible to produce around 30 MT/year of additional silver. The company has also deployed an exploration program which will make it possible to sustain the asset. Also, the commissioning of the quarrying project ensures the treatment of minerals on the surface (going from 2 t/month to 3 t/month). Finally, silver production is known, during the first quarter of this year, a link of 28% under the combined effect of the increase in production of the underground mine and the entry into production of the quarry. SMI’s weakness lies, for its part, in the drop in grades at the mine level following the increased complexity of its operation.

In terms of opportunities, the Managem subsidiary can promote itself by stabilizing the price of silver (25 dollars/oz) as a safe haven in a context of uncertainty fueled by the crisis in Ukraine. However, the company faces four threats. The first comes from silver prices which fluctuate internationally. Second, the SMI is highly exposed to the risks of change. Third, high social and environmental risks hold back business. And fourth, the sector experiences high social and environmental risks.


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