Maxim starts Contango Ore at Buy ahead of Alaska mine revenue ramp

Maxim initiated coverage of Contango Ore with a Buy rating and $36 price target. The company’s access to an existing gold processing facility, a joint venture with a larger gold company, a higher grade of gold compared to all other existing gold mines in Alaska, and a $70M credit facility altogether should help Contango to start producing gold from a mine in Alaska in the next year, the analyst tells investors in a research note. The stock’s premium valuation relative to its peer group average is also justified to take into account Contango’s existing funding and permits to bring the Manh Choh mine to production, the firm added.