Buy The AuRico Gold Spin-Off
SomaBull • 14 Comments
SomaBull • 14 Comments
Jul. 6, 2015, 6:43 PM
- Alamos Gold (NYSE:AGI) completed its acquisition of AuRico Gold (NYSE:AUQ) last week, a deal that gives it much greater scale that should help it withstand a difficult gold price environment, but TD Securities analysts Steven Green says the combined company still faces numerous challenges.
- Most significant is AGI's relatively high operating costs, with estimated all-in sustaining costs of more than US$1K/oz. in 2016 - above most mid-tier peers - and Green expects AGI's Young-Davidson and Mulatos mines will operate at close to breakeven at current metal prices.
- Young-Davidson is AGI's biggest catalyst, and the miner expects to complete the production ramp-up by 2017, but Green thinks there is still plenty of execution risk.
- Green maintains his Hold rating but cuts his stock price target to $8.50 from $9.
May 7, 2015, 6:17 AM
- AuRico Gold (NYSE:AUQ) declares $0.01/share quarterly dividend, -56.5% decrease from prior dividend of $0.023.
- Forward yield 1.16%
- Payable June 2; for shareholders of record May 19; ex-div May 15.
May 7, 2015, 1:33 AM
- AuRico Gold (NYSE:AUQ): Q1 EPS of -$0.03 beats by $0.02.
- Revenue of $65.36M (-7.9% Y/Y) misses by $5.9M.
May 5, 2015, 5:35 PM
- ACAS, ALB, ALDW, AMTG, ANAC, AREX, ATML, ATO, ATVI, AUQ, AWK, BEAT, BGC, BNFT, BREW, BRKR, BWC, CCRN, CECO, CF, CHEF, CHGG, CJES, CKP, CLR, CLVS, CODI, CPA, CPE, CSLT, CSOD, CUZ, CXW, CZR, DMD, DPM, ECR, EFC, EGN, ENSG, EPAM, EPM, EQC, ESS, ETE, ETP, EXTR, EXXI, FLTX, FNGN, FNV, FOXA, FRSH, GBDC, GMCR, GUID, HIVE, HR, HUBS, IL, IO, IVR, JKHY, JONE, KIM, KND, KW, LCI, LGCY, LHCG, MASI, MCHX, MELI, MET, MITT, MRIN, MRO, MTDR, NEWP, NLY, NP, NSIT, NSTG, NUS, OAS, ORA, OSUR, PAYC, PDLI, PEGA, PFMT, PGTI, PHH, PMT, PNNT, PRAA, PRI, PRU, PSEC, PTLA, QLTY, QTM, REG, RIG, RIGP, RST, RYN, SBY, SD, SGM, SLH, SN, SQNM, SUN, SWM, SXL, SZYM, TCAP, THRX, TRIP, TROX, TSLA, TTPH, TUMI, TWO, VECO, VNDA, VRNS, VVC, WBMD, WFM, WGL, WTI, XNPT
Apr. 27, 2015, 6:45 PM
- Gold surged above $1,200/oz. today in its best day since January, as U.S. June gold futures settled up 2.4% to $1,203.20/oz. in its best percentage jump since Jan. 15, amid reports Friday that Venezuela's central bank had converted 1.4M oz. of its gold reserves into at least $1B in cash through a swap with Citibank.
- "That was a huge potential seller taken out of the market. It's not an overhang anymore," Dennis Gartman said of the Venezuela deal.
- Other gold watchers say the bigger factor driving prices was the expiration of May options and short covering; an increase of 13K shorts in the market is a positive since those traders could be forced to buy gold when they cover, says Kevin Grady of Phoenix Futures and Options.
- ETFs: GLD, IAU, SGOL, UGL, DGP, GLL, UGLD, DZZ, GLDI, OUNZ, DGL, DGZ, DGLD, AGOL, TBAR, GEUR, UBG, GYEN, BAR
- Miners finished mostly higher: NEM +2.4%, ABX +2.2%, AU +2.6%, GOLD -0.4%, GFI +5.3%, GG +0.9%, SBGL +3%, NGD +3.1%, EGO +1.7%, AUY +1.8%, KGC flat, IAG +4.2%, BTG +1.9%, HL +1.9%, RGLD -0.8%, FNV +0.8%, AGI +1.3%, AUQ +2.3%.
Apr. 24, 2015, 6:50 PM
- In another day of broad losses among in precious metals miners, Newmont Mining (NYSE:NEM) enjoyed a 6.5% surge following strong Q1 results that included impressive cost reductions in gold and copper production.
- J.P. Morgan analysts especially liked the strong first quarter at Batu Hijau and Yanacocha and the deferral of some capex that allowed NEM to generate $344M in free cash flows and pay down $200M in debt; the firm says full-year guidance could be raised if cost reductions can be maintained in Q2.
- Otherwise, it was not a good day for mining equities, following another drop in gold futures which tumbled to their lowest level in more than a month.
- NEM CEO Gary Goldberg expects gold prices to gain ~25% to $1,500/oz. by 2020 on rising demand from China and a weaker dollar; for now, Goldberg says the strong U.S. dollar is “definitely having an adverse effect” on gold prices, and he expects the dollar will “eventually come back off of its highs in the next couple of years."
- In today's trade: ABX -0.9%, AU -4.2%, GG -2.6%, SBGL -7.7%, GOLD -2%, AUY -2.5%, NGD -1.9%, GFI -4.4%, SLW -1%, PAAS -1.6%, EGO -4.1%, RGLD -2.7%, FNV -2.1%, KGC -0.4%, IAG -1.4%, BTG -1.9%, HL -1.9%, AGI -1.6%, AUQ -3.1%.
Apr. 22, 2015, 6:36 PM
- Gold tumbled today to its sharpest single session loss in more than six weeks, after the strong U.S. existing home sales report that raised expectations for a Fed interest rate hike in June.
- U.S. gold futures for June delivery fell $16.20 (-1.4%) to settle at $1,186.90/oz., while silver fell 1.3% to $15.77.
- Among precious metals miners today: ABX -3.4%, AU -4%, GG -2.8%, SBGL -6.8%, GOLD -1.5%, AUY -3.7%, NG -1.9%, GFI -5%, SLW -2.1%, PAAS -3.5%, NEM -3.1%, EGO -1.4%, RGLD -2.1%, FNV -3.4%, KGC -1.7%, IAG -4.1%, BTG -2.5%, HL -3.8%, AGI -5.4%, AUQ -4.4%.
- ETFs: GLD, SLV, GDX, NUGT, IAU, AGQ, DUST, SIL, USLV, SIVR, SGOL, ZSL, UGL, GLDX, DGP, GLL, UGLD, DZZ, SLVO, GLDI, SGDM, DSLV, OUNZ, SLVP, DGL, DBS, DGZ, RING, DGLD, AGOL, PSAU, USV, TBAR, GEUR, UBG, GYEN, BAR, GDXX
Apr. 14, 2015, 6:57 PM
- The merger of equals between Alamos Gold (NYSE:AGI) and AuRico Gold (NYSE:AUQ) makes no sense for AGI shareholders, as the deal "effectively rescues" AUQ from its balance sheet troubles and provides AGI no premium in exchange, says TD Securities analyst Steven Green.
- The deal's enterprise value of $392 for AGI vs. AUQ's EV of a bit more than $1B means the merger undervalues AGI, Green says in downgrading AGI to Hold from Buy and cuts his stock price target to $9 from $11.
- The deal effectively puts both miners into M&A play, Green says, speculating that Agnico Eagle Mines (NYSE:AEM), Kinross Gold (NYSE:KGC) and Iamgold (NYSE:IAG) could be interested in AGI.
Apr. 13, 2015, 8:34 AM
- In a merger of equals, current owners of Canada's Alamos Gold (NYSE:AGI) and AuRico Gold (NYSE:AUQ) will each own roughly 50% of the new company - named Alamos Gold - whose value will be about $1.5B. The new company's board will have five directors from each firm.
- Also part of the deal, the new company will spin off some assets, including AuRico's Kemess project in B.C.
- A conference call is just underway.
Apr. 10, 2015, 10:59 AM
- AuRico Gold (AUQ +2.7%) is upgraded to Buy from Hold with a $5 price target at Canaccord, expect its underperforming shares to recover over the next few quarters thanks to an expected strong performance at its flagship Young-Davidson mine.
- The firm says the YTD underperformance is partly explained by the reserve writedown and asset impairment charge recorded at El Chanate, but adds that the market may have overreacted in light of El Chanate's contribution to AUQ.
- At the same time, Canaccord downgrades Detour Gold (OTCPK:DRGDF) to Hold from Buy with a C$13.50 price target, down from C$15, citing lower assumed gold prices and recent outperformance by the shares, while adding that there could be upside to Detour's shares if gold prices were to rise significantly.
Apr. 8, 2015, 5:46 PM
- McEwen Mining (NYSE:MUX) fell 5.6% in today's trade after yesterday's news that 900 kg of gold-bearing concentrate containing 7K oz. of gold - ~$8.4M in potential revenue - was stolen from its refinery in Mexico's Sinaloa state.
- Armed robberies of significant quantities of gold are not common, but operators in northern Mexico have been targeted in the past as the region is associated with cartels and gangs.
- The robbery raises concerns about other companies with exposure in northern Mexico, which include AGI, AUQ, CDE, PPP and TGD; among those with operations nearby are GG, PAAS, GPL, OTCPK:FNLPF and OTCQX:SMNPF.
Mar. 11, 2015, 2:16 PM
- AuRico Gold (AUQ +6.3%) shoots higher after Raymond James upgrades shares to Strong Buy from Market Perform with a $4.50 price target, seeing the recent selloff as overdone and believing AUQ remains positioned to continue its execution momentum at the Young Davidson gold mine in Ontario.
- Young Davidson also offers a 20-year lifespan with mine-level all-in costs at ~$900/oz., attributes Raymond James says might attract potential suitors as the mine is viewed as a "trade-up in asset quality."
- The firm feels AUQ provides a compelling investment outlook with growing production and cash flow along with a balance sheet that could support the Young Davidson mine toward its 2016 design goal.
Mar. 6, 2015, 2:42 PM
- Precious metals miners are bludgeoned as April Comex gold tumbles 2.7% to $1,164.30/oz. for its lowest settlement of the year so far.
- The culprit was the upbeat February jobs report, which sparked fears that the improving economy will prompt the Fed to hike interest rates sooner rather than later.
- ABX -6%, GG -6.6%, NEM -7.9%, AU -6.1%, AUY -6.6%, KGC -7.8%, SLW -3.4%, GOLD -5.4%, EGO -5%, GFI -7.9%, HL -10.4%, RGLD -8.6%, FNV -3.2%, NG -4.3%, SBGL -6.4%, PAAS -4.3%,BTG -6.5%, IAG -6.2%, AUQ -5.6%, AGI -2.8%.
- Precious metals ETFs: GLD, SLV, AGQ, IAU, USLV, SIVR, SGOL, ZSL, UGL, DGP, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, OUNZ, DGL, DBS, GLTR, DGZ, DGLD, AGOL, DBP, WITE, TBAR, USV, UBG, JJP, BAR, GYEN, GEUR, BARS, RGRP, BLNG
- Precious metals mining ETFs: GDX, NUGT, DUST, SIL, GLDX, SLVP, RING, SGDM, PSAU, GDXX
Feb. 19, 2015, 4:51 PM
- AuRico Gold (NYSE:AUQ) declares $0.023/share quarterly dividend, in line with previous.
- Forward yield 2.71%
- Payable March 16; for shareholders of record March 2; ex-div Feb. 26.
Feb. 19, 2015, 4:33 PM
- AuRico Gold (NYSE:AUQ): Q4 EPS of -$0.04 beats by $0.01.
- Revenue of $71.19M (+40.2% Y/Y) beats by $3.23M.
Feb. 18, 2015, 5:35 PM