Blackmont Analyst Raises Eldorado Gold's Price Target

Now that Eldorado Gold Corp.'s (EGO) acquisition of Frontier Pacific Mining is all but closed, Blackmont analyst Richard Gray has officially added the Perama Hill gold project in Greece to his valuation mix. 

As a result the analyst increased his net asset value for Eldorado from C$5.55 to C$5.90 and price target on the stock from C$8.25 to C$8.50. He maintained his "hold" rating.

Mr. Gray said:

While we believe permitting of the project will be a challenge, we do assume the mine is ultimately constructed and that production should begin in 2011 at a rate of 135,000 ounces/yr with cash costs of $250/oz and capex of $120-million.

This would take Eldorado's annual production over the 600,000 ounce per year level (assuming Efemcukuru, Eldorado's gold project in Turkey, is also built on time).

Eldorado now holds 90% of Frontier shares and will buy up the remaining shares over the next 90 days. Frontier is now delisted.