Opinions
Dennis da Silva
Premier Gold Mines
PG-T
TOP PICK
Aug 02, 2016
$4.970
Stock price when the opinion was issued
metal mines
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His target price is $2.90. They are involved in a hard rock open pit project in Northern Ontario. It holds about 5.8 million ounces of resources. It has low geopolitical risk. It is also operating a project in Mexico. The risk is if gold prices falter. They also need about $200 million to develop the hard rock project, so there is a large short position out against them. Yield 0% (Analysts’ price target is $3.88)
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PAST TOP PICK
(A Top Pick Oct 16/19, Down 28%) It is like everything that could go wrong did go wrong. Their Mexican mine did not meet guidance and did not generate enough free cash flow. Their 50% cash flow in a north Ontario deposit has had the partner cause a delay in the capital spending. They had to raise money for their joint venture in Nevada where it is accelerating in spending. It is highly levered.
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TOP PICK
It's a sum-of-the-parts story with three moving parts. The knock on it was they always needed to finance, but they financed. He likes their assets, including a joint venture with Barrick, which is worth PG's market cap alone. Their Ontario and Mexico assets are extraneous and will likely be sold. (Analysts’ price target is $3.93)
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Just acquired the Mercedes mine from Yamana Gold (YRI-T) for about $140 million, so they are now on the cusp of being a producer. South Arturo in Nevada will be producing any time now with a short mine life, so there are people questioning what happens after 2.5 years. Mercedes is also relatively short with about a 3.5 year reserve life. These are 2 projects the management team feels there is more to.