Seeking Alpha

Agnico Eagle Mines reverses to loss despite favorable commentary

  • Agnico Eagle Mines (AEM -1.6%) fails to hold early gains after announcing it exercised the 19.8M warrants of Pershimco Resources (RSPRF) it acquired in January.
  • Sterne Agee had raised its price target for AEM to $48 from $42, noting that continued careful cost and capital management with upside potential generated by the newly acquired, co-owned Malartic mine should allow for earnings, cash flow and multiple improvement; as gold and silver prices grind higher, AEM should continue to outperform.
  • The firm is more positive generally on the gold mining sector, noting the aggressive restructuring of operations for a $1.1K-$1.2K/oz. gold market; besides AEM, it likes Coeur Mining (CDE), Newmont Mining (NEM) and Gold Resource (GORO).
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Comments (2)
  • R.E. Investor
    , contributor
    Comments (31) | Send Message
     
    GORO (Gold Resource Corp.) is one of the best Junior miners you can invest in. Why? 1). $0 debt net cash; 2). Pays a dividend that fluctuates between 3% - 2½% at current pps; 3). One of the lowest Total Cash Cost per oz of gold at $422 per oz; 4) Small float at 54 million shares; and 5). Operating Cash Flow positive at 12½ million & Levered Free Cash Flow positive at 6½ million.

     

    If a senior miner were looking to make an acquisition that was accretive, GORO is one of the few miners that would meet that criteria. GORO traded as high as $33 per share in the last 24 months and as of 07-10-2014 trades at $4.87 (an 85% discount).

     

    GORO is the one to watch.
    10 Jul 2014, 07:44 PM Reply Like
  • Long and Strong
    , contributor
    Comments (7) | Send Message
     
    I own plenty of GORO and it has been interesting. I like it at the current price, but management has failed to deliver after getting up to the 100K gold equiv. They have to exceed projections for a couple of quarters and regain investor's trust. They are comparable to Silvercorp in the silver space. I believe these 2 will be late to the precious metals party whenever it breaks out.
    14 Jul 2014, 03:46 PM Reply Like
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