From their new reasearch:
CBH Resources (CBH)
Our valuation rises 3% to 74c a share after increasing near term silver forecasts. We maintain our Speculative Buy looking for strong growth firstly from Rasp in mid 2008 followed by Panorama in FY10. Panorama should bring improved margins while copper will diversify the revenue stream. Rasp margins will benefit from high grade remnant Broken Hill ore.
Near term multiples are attractive considering the growth to come. The balance sheet is solid and CBH well placed to fund expansions. Friction with 25.8% shareholder Toho Zinc adds to intrigue. Recent announcements sound like the type made by a company being stalked. CBH won't necessarily be taken over, but it's a nice option on an undervalued stock. The speculative caveats are high production costs at Endeavor and development risk.
Costs leave the company exposed to any continued pullback in metals prices. Management is working to improve costs and progress would help confidence in the story.
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