Opinions
Rick Rule
Equinox Gold
EQX-T
BUY
May 31, 2024
Stock price when the opinion was issued
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EQX operates 8 producing gold mines in Brazil, Mexico, Canada and the USA and is enroute to producing 1 million ounces annually. The company expanded its holding in the Greenstone mine to hold 100% of the asset. It trades at 14x earnings and under book value. We recommend setting a stop-loss at $5.50, looking to achieve $10.00 -- upside potential over 35%. Yield 0%
(Analysts’ price target is $10.19)EQX is reiterated as a TOP PICK. Management updated estimates of its 100% owned Ontario holding, indicating a higher grade of gold yield than previously estimated. We like that quarterly cash reserves are growing, while debt is reduced. It trades at 10x earnings and under book value. We recommend trailing up the stop (from $5.50) to $6.00 at this time, looking to achieve $10.50 -- upside potential of 23%. Yield 0%
(Analysts’ price target is $10.33)Recent projects that are not on time very disappointing (market turned out to be correct). Problems with operations elsewhere in the company also a concerned. Investors could see another equity issue - but isn't sure. Company has a lot of debt. Will continue to hold share - believes in management.
They've had mixed results in past years. They are, though, ramping up an Ontario project to fill capacity, as they pay down their heavy debt. At $2,800 gold and at full capacity, the company expects to pay down all debt in 3 years. Stick with it. It's expected for gold to keep rising, some saying $3,000.
Owns shares and has recommend buying in the past. Recent Northern Ontario expansion not in favor with investors. However, weakness is share price presenting a good buying opportunity. Balance sheet will be strained by recent M&A - but new assets are expected to pay off.