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Broker Intersuisse has slapped a buy rating on the company and a 12-month target price of 80c as the Queensland floods are expected to accelerate its growth as a dewatering specialist in 2011.
“While mines are focused on urgent recovery, the timelines for obtaining appropriate equipment and the need for specialist know-how to effectively solve the problems within the constraints of environmental restrictions argue for the use of a specialist provider rather than merely hiring a pump,” Intersuisse said.
“As mine water issues are typically ongoing, Resource Equipment’s solution tends to be the most economic.”
Resource Equipment estimates that more than 70% of Australian mines have water management issues and more than 90% control their water management in-house.
The company’s Queensland division is based in Mackay while its New South Wales business is based in Rutherford.
Shares in the company were unchanged at 62c this morning.
