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Detour GoldDGC.TOTOP PICKMay 30, 2014Stock price when the opinion was issued
As of Feb 04, 2020. Market Open.
It is a higher cost asset. It is more volatile. They have a cash flow profile that will drop in a couple of years. The stock is off while investors plan to come back to it in a couple of years. You are buying it for the cost of the infrastructure. He would prefer to hold it for two years. (Analysts’ target: $20.44).
New mine in northern Ontario is producing around 500,000 ounces a year. Costs are slightly above the gold price, but over the long run it should come down. Missed a little financially on sales in Q1, but he doesn’t just look at sales. Looks at tons produced, grades and ultimately recoveries. Using metrics that he uses on mines starting up, this one looks better than he expected. Sees fundamental value north of $20. Thinks this is in the crosshairs of a lot of major companies.