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Jaguar Mining Inc. (JAG) shares got a shot in the arm Tuesday, rising more than 7% in morning trading after Blackmont analyst Richard Gray increased his price target on the junior miner 29% from C$12 to C$15.50.

"A recent mine site tour of Jaguar's properties has given us greater confidence in the company's growth profile and exploration upside," Mr. Gray said in a note to clients.

"With an aggressive, deep drilling program planned at all three main projects, the likelihood of material increases in the resources at each property is high."

Convinced that Jaguar deserves multiples attributable to stronger mid-tier producers, Mr. Gray increased his net asset value target multiple from 1.25 times NAV to 1.5 times and his 2008 cash flow per share multiple from 10 times to 15 times.

The analyst, who maintained his "buy" rating, also said he attributed a takeover premium into his new valuation.

JAG 1-yr chart:

Source: Jaguar Mining Jumps On Upgrade From Blackmont