What Happens When Costs Match the Selling Price Of Gold ?
Posted: May 15, 2013 Filed under: Speculative | Tags: Business, Gold as an investment, Lake Shore, LSG, Ounce, Precious metal, Share price, Timmins Leave a comment »
Map of Timmins, Ontario (Photo credit: Wikipedia)
LAKE SHORE GOLD
(T-LSG) $0.325 n/c
From $ 4.00 two years ago
One look at the two-year chart of Lake Shore Gold shows you how bad things are in the natural resource sector, if you didn’t know already. Lake Shore Gold is not the only story trading at nearly one-tenth of where it was.
The bad part of that is much of the company’s current building and mine development was financed with issues nearly ten times today’s price.
Hard to believe the Timmins Times featured an article on January 22nd with the headline, “Glittering year ahead for Lake Shore Gold says VP Dan Gagnon.”
Well at least their production numbers appear to be going up as their Timmins West Mine is the centre of three mines expected to be in operation
having done 85,000 ounces last year. The article quotes Gagnon is expecting 120,000 to 135,000 this year and 150,000 ounces in 2014. But can they make any money at it?
The suggestion these days is that there’s many mines with costs of production way up at $1250 to $1450 and that doesn’t leave a lot left. According to the Timmins Times article, the suggestion is that their costs of production is between $800 and $875 an ounce. As one looks at the share price, one wonders wouldn’t one? Or is it just that most people have given up on the precious metals sector. Not precious at all anymore.
Lake Shore is important to the folks of Timmins and area as the company has 500 full-time employees, 200 contractors at the mine and 125 other employees working on the expansion projects. And this work tends to pay well, or at least it did.
The very low stock price makes one wonder if there are some tidbits of bad news about to happen. Higher production costs, write-downs or even losses that will be coming out tomorrow at their annual meeting. For sure, it won’t be a bunch of happy people around if anyone even bothers to
show up.
Meanwhile one service suggests that several analysts follow the stock with the average target being $1.17. Really?
When was the last time a speculator made a buck in the precious metals market listening to analysts?
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Apprentice Millionaire Program Gifts – T-Shirts, coffee Mugs
Posted: May 11, 2013 Filed under: AMP Books and Seminars | Tags: Business, Ceramic art, Coffee, Italy, London, Mug, Shopping, United States Leave a comment »
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Goldrock Mines Corp.
Posted: May 1, 2013 Filed under: Speculative | Tags: $100 million, $3 million, Argentina, Business, Nevada, Salta, Salta Province, TSX Venture Exchange Leave a comment »
Español: Viaducto La Polvorilla en la provincia de Salta, Argentina. Se trata del tren “a las nubes”, cruzando un conducto de agua. La foto está tomada desde el último vagón. (Photo credit: Wikipedia)
GRM : TSX-V : C$0.64
SPECULATIVE BUY
Target: C$0.90
COMPANY DESCRIPTION:
Goldrock Mines (formerly Mansfield Minerals) is a development stage gold company advancing their fully permitted (Oct 2011), Lindero heap leach project located Salta, Argentina. Recent management changes have brought the relevant expertise (financing and technical execution) required for the company to execute the development of the project and realize the future cash flows from it.
Investment recommendation
The company released FQ3/12 (ending February 2013) financial results with an end of period cash position of C$3.4 million. We maintain our
SPECULATIVE BUY recommendation and target price of C$0.90.
Investment highlights
The company’s previous cash position (FQ2/12) was C$5.30 million. During FQ3/12, operating expenditures were ~C$0.46 million with an additional ~C$1.70 million related to investing activities (Lindero FS) and ~C$0.23 million in positive FX adjustments resulting in a ~C$3.35 million cash position at the end of FQ3/12 versus our estimate of C$4.1 million. We estimate that GRM will close its fiscal year (May 2013) with a cash position of ~C$3 million.
Following the release (April 17) of its feasibility study (FS) on its wholly owned, fully permitted Lindero open pit/heap leach project in northwest Argentina (Salta province), we anticipate the company to redouble its efforts to crystallize financing sources to fund its development ($160 million).
We have modeled a debt facility for ~C$100 million (five year, 12%, FQ2/13), allowing for initial construction and purchasing long lead items, followed by an assumed equity raise of ~C$56 million (80 million shares at C$0.70/share, FQ2/14) and a WC facility (C$40 million, 15%) to enable commercial production by FQ1/15 (August 2015).
Additional potential catalysts include the maiden resource estimate on the Arizaro copper-gold porphyry (3-4 km from Lindero) expected by fiscal year-end (May 30, 2013). Arizaro represents upside potential to not only extend the mine life of Lindero, but to offset processing the lower grade stock pile to a later date.
B2BGold Update
Posted: April 30, 2013 Filed under: Intermediate Producers | Tags: Business, Chief of police, Gramalote, Masbate, Naga Camarines Sur, Philippine, Record producer, Share price Leave a comment »
Masbate City (Photo credit: Bella Abelita)
Q1/13 production and 2013 Masbate guidance better than expected
We reiterate our BUY rating on B2Gold following the release of Q1/13 production results
and 2013 production guidance for Masbate, both of which were better than we
expected. B2Gold remains a 2013 Canaccord Genuity Focus List pick based on one of
the best production growth profiles in the sector, relatively low permitting, financing
and new mine development risk, and several upcoming catalysts that we believe should
pave the way for strong share price performance in 2013. With a strong, debt-free
balance sheet and relatively low capital requirements to fund growth to 540 koz by 2015
(relative to the expected cash flow profile) we see B2Gold as very well positioned to
weather even an extended period of low gold prices.
Investment Highlights
Consolidated attributable production for Q1/13 (Masbate effective Jan 16) was 79,661 oz and better than our estimate of 70,656 oz. All of the company’s operations performed better than our forecast.
Attributable production from Masbate was 36,467 oz (in line with B2Gold’s internally budgeted numbers) but better than our estimate of 29,500 oz. The company has provided 2013 production guidance for Masbate of 175,000 – 185,000 ounces for the full year. While we had expected guidance to be below the 200,000 oz indicated by CGA, it is actually better than we had forecast. Management attributed the variance in guidance (vs CGA’s budget) to a change-out of the old SAG mill to a new SAG mill expected to be delivered in late August or September.
Valuation
Our 12-month C$5.00/share target price is unchanged based on 1.1x our 5%/peak NAVPS estimate of US$4.59, assuming US$/C$ parity.
Upcoming Potential Catalysts
Gramalote pre-feasibility study (Q3/13E) and EIA submission (May 2013E)
Masbate geological model, mine plan and reserve update (mid-2013E) and possible
Related articles
- B2Gold (BTO : TSX | BUY, Target C$6.00) (ampgoldportfolio.com)
- B.Gold Spring 2013 Lookbook (DenimHunt.com)
Agnico – Eagle Invests In Sulliden Gold
Posted: April 11, 2013 Filed under: Exploration Companies | Tags: AEM, Agnico-Eagle Mines, Business, Mining and Drilling, New York Stock Exchange, Peru, Sean Boyd, Toronto Stock Exchange Leave a comment »
English: Logo of Agnico-Eagle Mines Limited . (Photo credit: Wikipedia)
SUE
TSX : $0.83
A mining company named Sue!
Vote of confidence. Sulliden Gold announced that Agnico-Eagle Mines (AEM) has entered into a subscription agreement to
make a strategic investment of $24,000,000 into SUE through a non-brokered private placement of units. As a result of the
transaction, AEM will own 9.96% of SUE’s issued and outstanding shares on a non-diluted basis. Under the terms of the
subscription agreement, AEM will purchase a total of 26,966,292 units at a price of $0.89 per unit. Each unit comprises one
common share and 0.7 of a common share purchase warrant. Each whole share purchase warrant will entitle AEM to acquire
one common share of SUE at a price of $1.31 for a period of two years from the date of issuance.
Commenting on the deal, AEM’s President and CEO, Sean Boyd, stated, “Our investment highlights the quality and potential of SUE’s Shahuindo
Project. We also view this as an opportunity to gain exposure to another jurisdiction with a well-established mining culture. We look forward to participating in the advancement of Shahuindo towards production.”
SUE’s Shahuindo Project is located in a world-class gold producing belt in northern Peru. In September 2012, SUE completed a Feasibility Study highlighting a straightforward open pit mine with heap leach recovery, with capital requirement estimated at $131.8 million, supporting a
mining rate of 3.65 million tonnes per year and annual production of ~90,000 gold equivalent ounces at average cash operating costs of $552 per ounce.
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- Hedge Funds Aren’t Crazy About Agnico-Eagle Mines Limited (USA) (NYSE:AEM) Anymore (insidermonkey.com)
Pilot Gold : Envy Among Juniors
Posted: April 4, 2013 Filed under: Exploration Companies | Tags: Business, Drill, Drill bit, Gold, Radio masts and towers, Teck Resources, Toronto Stock Exchange, Turkey Leave a comment »
Gold Buddha (Photo credit: @Doug88888)
PLG
TSX : $1.63)
. While many junior gold companies are struggling to survive and are desperately looking for capital, that is not the case for Pilot Gold. Thanks to the company’s success through the drill bit, experienced management team and prudent financing last year, Pilot has a strong balance sheet and on Tuesday announced its next phase of aggressive plans.
Management highlighted that the 2013 drilling campaign at the TV Tower property in northwestern Turkey commenced on March 23 with a total of 30,000 m of drilling planned property-wide, including 15,000 m on the KCD target and 7,500 m each on the Kayali and Columbaz targets. Currently, three diamond core drills are in operation, while one additional reverse circulation (RC) drill may be activated later in the season.
TV Tower drilling in 2012 and early 2013 focused entirely on testing the high-grade KCD target in the northeastern part of the property. Drilling confirmed the presence of a 250 by 400 m gold zone, which remains open down-dip to the north, and established the presence of a large, 400 by 600 m stratabound silver zone that overlies the gold zone and is open to the west and northwest. TV Tower is a JV between PLG and Teck Resources (TCK.B), with Pilot as project operator.
Related articles
- Pilot Gold Reports Year-End Financial Results (sys-con.com)
- Pilot Gold Update : high-grades and aggressive plans. (ampgoldportfolio.com)
Junior Golds – Takeover Hopes
Posted: March 27, 2013 Filed under: Juniors, Takeovers | Tags: AEM, Agnico-Eagle, Agnico-Eagle Mines, Board of directors, Business, Gold, New York Stock Exchange, Toronto Stock Exchange 1 Comment »English: Logo of Agnico-Eagle Mines Limited . (Photo credit: Wikipedia)
(AEM : TSX : $40.85)
Urastar Gold
(URS : TSX-V : $0.24)
FINALLY, the majors are buying!
Junior gold investors have been rewarded for their patience with news that gold major Agnico-Eagle is buying gold junior Urastar Gold for $0.25 per share, which is a 42.9% premium to the previous day’s closing price.
The offer values the URS, on a fully-diluted basis, at $10.75 million. Out-of-the-money share purchase warrants and options will be cancelled as part of the transaction. Agnico-Eagle has agreed to advance approximately $1.6 million to the company on closing to fund the payment of the company’s transaction expenses and severance costs. The board of directors of Urastar has unanimously approved the transaction and each of the directors and officers of URS, as well as certain other URS securityholders, collectively holding approximately 27.12% of the number of Urastar securities entitled to vote at the meeting, have entered into support agreements with Agnico-Eagle and agreed to vote their securities in favor of the arrangement.
Related articles
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Osisko Mining Drill Results
Posted: March 22, 2013 Filed under: Intermediate Producers | Tags: Beaver, Business, Canada, KirklandLake, Ontario, Osisko Mining, September 2012, Toronto Stock Exchange Leave a comment »OSK
TSX : $6.16
Two new discoveries.
Osisko announced that new drilling at its 100%-owned Upper Beaver gold project located in Kirkland Lake, Ontario has led to the discovery of two new gold-copper zones, the East Basalt Zone and the North Q Zone.
The East
Basalt Zone is located ~700 m north-east of the Upper Beaver deposit, while the North Q Zone is located 400 m to the northwest of the Upper Beaver deposit. Highlight high-grade results from the two new discoveries, include: i) East Basalt Zone Discovery: 9.3 g/t Au with 1.7% Cu over 18.1 m (Hole UB13-284), and 2.2 g/t Au with 0.5% Cu over 17.8 m (Hole UB13- 287); ii) North Q Zone Discovery: 11.0 g/t Au with 1.6% Cu over 2.0 m (Hole UB13-282).
Management also stated that infill drilling continues to confirm the continuity of the mineralization in the western portion of the main Upper Beaver deposit. An updated mineral resource at Upper Beaver was announced on September 2012, demonstrating an Indicated resource of
6,870,000 t at 6.6 g/t Au (1,461,000 oz) and 0.37% Cu (56 M lbs), and an Inferred resource of 4,570,000 t at 4.9 g/t Au (712,000 oz) and 0.32% Cu (32 M lbs).
Osisko’s focus at Upper Beaver for 2013-2014 will be on the development of the 1,300 m exploration shaft, including engineering, design and fabrication of the head frame and hoisting facilities budgeted at $70 million. The shaft collar has now been established to a depth of 26 m and exploration on the deposit continues with six drills.
Pilot Gold Update : high-grades and aggressive plans.
Posted: March 21, 2013 Filed under: Exploration Companies | Tags: Business, Drill, Matt Lennox-King, Mining and Drilling, Teck Resources, Toronto Stock Exchange, Tower, Turkey Leave a comment »PLG : TSX : $1.82
Investors applauded Pilot Gold’s most recent results, as drilling further demonstrates high-grade continuity at the KCD Target, in northwest Turkey.
The results released Tuesday were from the 15 remaining diamond core holes from the Phase 1 drilling program. Management noted that the holes are wide-spread across the property and targeted KCD”s gold and silver zones. Infill drilling highlights included: i) 25.7 g/t Au, 47.2 g/t Ag and 2.12% Cu over 16.5 m in hole KCD-102, including 142 g/t Au, 141 g/t Ag and 3.39% Cu over 2.0 m; and, ii) 13.9 g/t Au over 6.3 m in hole KCD-99. While highlights from Exploration drilling included 4.71 g/t Au and 71.7 g/t Ag over 8.5 m and 2.93 g/t Au over 8.0 m in hole KCD-95.
Commenting on the results, PLG’s President and CEO, Matt Lennox-King, stated, “Our first program as operator has confirmed a large, central gold zone overlain by a robust silver blanket. Both remain open in multiple directions and will be aggressively followed-up in our upcoming drill program.” Going forward, the company plans an additional 25,000- 30,000 m of drilling at TV Tower with a focus on KCD, Kayali and Columbaz targets in 2013. TV Tower is a JV between PLG and Teck Resources (TCK.B), with PLG as project operator.
