2241 GMT [Dow Jones]–UBS is downgrading base metals miner Independence Group (IGO.AU) to neutral from buy, but says it continues to favor the stock over rival Western Areas (WSA.AU) because of its diversified operating base and low-cost Nova nickel mine in Western Australia state. Also, UBS says it remains cautious about the amount of money that Western Areas needs to spend on its existing operations at a time when the company is barely cash-flow breakeven. UBS says its decision to downgrade Independence reflected the stock’s recent share-price strength. “Given Independence’s significant current exposure to gold, 47% of revenues in FY17 but reducing to 25% by FY19 with the full ramp-up of Nova, we could see Independence trade higher in the short term on expected gold price strength,” UBS says. IGO last traded at A$3.73; WSA last at A$2.48. (david.winning[a]wsj.com; [a]dwinningWSJ)
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