IMO, St Andrew Goldfields (SAS) was a joke of a company for many many years - simply brutal management (boneheaded decisions, non-stop undelivered promises, share rollbacks, you name it).
They now have new management in place, including the former CEO of Cambior (now St Andrew's Chairman). SAS's new management has completely changed the fortunes for the company's shareholders.
Again, I do not see SAS having any fundamental business advantages over Century Mining. SAS has $35M in secured Balance Sheet debt. Century Mining has $18M in gold payment debt (will eventually be $33M once the extra $15M cash is released from escrow).
St Andrew Goldfields:
Current share price = $.79
Current market cap = $257.3M
Current issued and outstanding shares = 325.7M
Current FD shares = 350M
Operating location (s) = Ontario
Expected first gold pour = 2009 - 2011
2009 production = 15,000 ounces
2010 production = 85,000 ounces
Production in future years = 110,000 ounces per year
P&P Reserves = 770,500 ounces
Expected cash cost per oz = $550 US
Century Mining:
Current share price = $.38
Current market cap = $128.2M
Current issued and outstanding shares = 337.5M
Current FD shares = 400M (approx.)
Operating location (s) = Peru and Quebec
Expected first gold pour = Q2’10
2009 production = 18,000 (SJ) ounces
2010 production = 65,000 ounces (SJ and Lamaque)
Production in future years = from 95,000 ounces (25K SJ + 70K Lamaque) to 185,000 ounces (35K SJ + 150K Lamaque)
P&P Reserves = 1,300,000 ounces
Expected cash cost per oz = $450 US - $500 US
1 comment:
As usual, thank you very much Production05 for your hard work and constant reminder of how undervalued CMM is.
I keep hearing how terrible PK is but I am choosing to ignore the past and concentrate on the future which looks very bright for CMM.
Production05 posted how Finskiy would use his warrants to protect CMM from bankers if they threatened his big investment in CMM. Well I believe Finskiy will protect his investment as agressively if PK was to falter on the execution of the business plan. So I do not believe that the PK effect on our SP will be here for much longer.
Here is some info on why gold is going higher, much higher:
There are many opinions as to where gold prices are going. My opinion after much reading in the last 2 months is that we are going higher, much higher. I am not as bullish as Rob McEwen, the great gold investor who is predicting up to $5000 per ounce, but I do think $1500 in 2010 is very achievable and $2000 in the next 3 year is my med term target.
An article that I cannot reprint here calculated that the top 40 producers in the world now mine ore that grades on average 1.7 g per ton. This is predicted to decrease to 1.2g per ton in 5 years (makes CMM's Lamaque 4.8g/t look great doesn't it!) So this is contributing to increasing the cost of production dramatically. Add to this that most central banks who have been selling gold in the last 2 decades are now either on the sidelines or buying gold and you can understand why we are up so dramatically in the last few years.
From a technical standpoint, Peter Degraaf wrote a blog (http://www.stockhouse.com/Columnists/2010/Jan/9/One-more-nail-in-the-coffin-of-the-gold-bears
today that gives many reasons why gold is going up. I suggest everyone to read it. In this presentation, he said that gold bears would try to hold gold at $1145. Well, when I pulled up http://www.kitco.com/
we smashed thru that resistance so quick the bears had no clue what hit them.
Another important player in this gold story is China. A wise friend of mine said to me: if you want to make money, follow the chinese lead. Here is an article http://www.proactiveinvestors.com.au/companies/news/4149/china-golds-no1-producer-and-consumer-is-taking-control-of-the-market-4149.html?ASX200 that explains why China did not buy the IMF gold that everyone expected they would. As you can see, this scenario if true is even more bullish for gold.
Currently, I do not see another gold company with the risk reward profile of CMM. If anyone else believes they have such a company, I would invite them to post them here and why they believe it is superior to CMM. It would be great for debate but also to look at diversification within the gold sector.
Respectfully,
Glorieux
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