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* Raises from "market perform" on option to buy Mantra shrs
* Cuts price target to C$5.70 from C$6
Dec 20 (Reuters) - Raymond James upgraded Uranium One Inc UUU.TO to "outperform" from "market perform," on the back of the uranium miner's option to buy all shares of Mantra Resources Ltd MRU.AX.
Last week, Russia's ARMZ said it would buy Mantra Resources for A$1.2 billion ($1.19 billion). Subsequently, Uranium One said it had the option to buy the shares to be acquired by ARMZ, its largest shareholder, for ARMZ's buy price plus additional expenditures. [ID:nLDE6BE05K]
A pre-feasibility study on Mantra's flagship Mkuju River project defined a conventional open pit operation producing 3.7 million pounds a year over a 12-year life, the brokerage said in a note to clients.
"Uranium One believes both the resource size and production rate can be substantially increased," Raymond James analysts said in a note to clients, cutting price target on the company's stock to C$5.70 from C$6.
The Vancouver-based company's shares, which have lost 4 percent in value since posting third-quarter results in November, rose 6 percent to C$4.64 on Monday morning on the Toronto Stock Exchange. ($1=1.012 Australian Dollar) (Reporting by Isheeta Sanghi in Bangalore; Editing by Joyjeet Das)