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magazineBroker says Savannah shareholders could double their money
Savannah Resources (SAV:AIM) 5.16p
Gain to date: 29%
Original entry point: Buy at 4p, 3 November 2016
Investors could more than double their money over the next 12 months by investing in Savannah Resources (SAV:AIM) today, says stockbroker FinnCap. It has published an extensive research note on the company which includes an 11p price target.
It says Savannah provides exposure to a wide range of mining assets including minerals sands, lithium and copper, most of which are relatively advanced projects.
FinnCap believes the minerals sands project in Mozambique is the most valuable at the moment, underpinned by having FTSE 100 miner Rio Tinto (RIO) as the joint venture partner.
‘However, the Portuguese project hosts what could be a substantial resource of lithium; this could rapidly add value to the portfolio,’ says analyst Martin Potts.
We think lithium as a commodity has been over-hyped and, as such, we believe Savannah’s recent acquisition of assets in Portugal was not a good move.
We would have preferred management to stay focused on expanding copper interests in Oman and proving up the mineral sands asset.
We will stick with the shares for now, but will consider taking profit on the next big upwards spike or if there are signs that the lithium project is taking up too much of management’s time. (DC)
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