Benj Gallander
Golden Star Resources
GSC-T
COMMENT
Jun 28, 2016
This company has some knocks against it. They had a lot of difficulties with the gold price being down. They always have trouble making money. Royal Gold made a royalty agreement and are giving them $130 million, but of course there is a whole payback with that, which will depress their earnings. He can see this going up $1.25.
Chang in management caused the last dip. Projects are located in Ghana, which doesn't have a developed infrastructure creating a lot of power interruptions. Also a lot of metallurgical problems. Would look elsewhere.
(A Top Pick March 7/07. Down 33.3%.) Issued a convertible debenture, which kneecapped the stock. He sold his holdings before this happened when it was clear they were running out of money.
(Top pick, March 12, 2007. Down 15%) They’ve had nothing but problems coming from their mines. Very, very cheap, new CEO, good production, great take over target. Would rather buy a stock that doesn’t disappoint.
Producing about 400,000 ounces of gold in Ghana and have about $.9 billion. Trades at about 5.5X cash flow. Cheap at 16.8X PE for 2010. 46% earnings growth forecast for 2011.
Gold in Ghana. Several operational problems over the last few years so has been in the doghouse. High cost producer at about $650 so are currently generating about $500 in cash flow with minimal capital spending. Ploughing this free cash flow into the ground for the first time to develop more resources.
This company has some knocks against it. They had a lot of difficulties with the gold price being down. They always have trouble making money. Royal Gold made a royalty agreement and are giving them $130 million, but of course there is a whole payback with that, which will depress their earnings. He can see this going up $1.25.