SA News • Thu, Nov. 20
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- Rio Alto reported strong Q3 earnings of $21 million as production costs came down more than the gold price.
- I anticipated continued economic production at La Arena even in a low gold price environment.
- Investors should note that the shares have outperformed, and the best strategy at this point is to wait on clarity for La Arena's copper/gold sulfide production, which comes in Q1.
- Once again, Rio Alto Mining has left investors confident after its Q3 results.
- The company is in good shape to match its 2014 gold production guidance.
- With the completed Sulliden merger, Rio Alto can begin utilizing its purchased property.
- Rio Alto Mining just announced its Q3 production results of 56,368 ounces.
- This is more or less in line with my expectations.
- This data point is largely neutral, and I continue to remain on the sidelines until we see the La Arena copper sulfide expense estimate.
- Rio Alto reported strong oxide drill results outside the 2014 reserve pit for the La Arena gold deposit.
- I hadn't anticipated this in my June article, although that was predominantly about another project--Shahuindo.
- The potential for increased gold-oxide resources is certainly bullish, but it doesn't add as much value as the bulls are presuming.
- I remain on the sidelines until I see the results of the copper sulfide feasibility study at La Arena.
- Rio Alto reported second quarter net income of $15.2 million and cash provided by operations of $22.4 million.
- With their low costs, Rio Alto presents investors with a good upside to rising gold prices while at the same time providing investors with good protection if gold prices drop.
- Rio Alto is projecting approximately 40% production growth from 2014 to 2016 as the Shahuindo project comes online.
- Rio Alto reported earnings of $15.2 million and operating cash-flow of $22.4 million.
- This reflects strong production figures, which I pointed out a month ago, but the company's long-term outlook depends on its long-term La Arena mine plan, which has yet to be updated.
- With the stock price rising recently despite my concerns, I would continue to be cautious in this name.
Update: Rio Alto Reports Strong Gold Production Figures
- Rio Alto reported that its Q2 production at La Arena increased 12.5% year over year and reaffirmed its guidance.
- While this is good news keep in mind that the company's gold mine has a short--5 to 6 year--mine life, and it doesn't justify the company's valuation.
- As I recently argued investors should wait for the results of the company's feasibility study for the copper portion of the La Arena Project before taking a position.
Rio Alto Overpaid For Sulliden: Proceed With Caution
- Rio Alto recently bought out fellow Peruvian gold miner Sulliden Gold for a 40%+ premium.
- While this combination makes sense given the proximity of the companies' mines, Rio Alto overpaid for Sulliden.
- The new company is now pricing in a sizable expansion of Sulliden's Shahuindo's life-span as well as a positive feasibility for the company's La Arena phase 2 project.
- These are not unlikely events, but they are not certainties either, and therefore investors should hold off on buying Rio Alto Mining for now.
Digging For Gold? Rio Alto Mining Is An Undervalued Gem
- Rio Alto Mining Limited, caught in a general mining sell-off, is executing, building reserves, and significantly outperforming the competition.
- As evidence of this, in Q1-2014, Rio Alto beat analysts EPS estimates by 75%.
- Rio Alto provides a margin of safety with a strong balance sheet and very little debt.
- Rio Alto is significantly undervalued and may have as much as 76% upside.
- Market has failed to account for excellent resource update in February.
- This resource update gives RIOM the financial flexibility to build Phase II of the La Arena mine without diluting shareholders.
- Phase II feasibility study results this summer offers catalyst for sudden repricing of stock higher.
- The market currently values Phase II at nearly zero. As such, Phase II is a nearly free call option on 4 billion pounds of copper/4 million ounces of gold.
- Existing operations are worth roughly $2/share, limiting downside even if Phase II doesn't work out.
Rio Alto Washes Out; Now A Compelling Bargain At 6x P/E
There are no Transcripts on RIOM.
Thu, Nov. 20, 6:54 PM
- "You can’t find a sector that is more out of favor right now than gold,” says former geologist and gold fund manager Joe Foster, who expects volatility to continue but with seemingly every headwind already pushing on the price of gold, it might not take much to spark a rally.
- Foster prefers junior miners to larger companies, as "the large caps have really gotten too big for their own good,” singling out Rio Alto Mining (NYSE:RIOM), thanks in past to its success with lower-cost heap leaching; RIOM recently acquired another heap leach operation in Peru.
- He also prefers regional miners, because geographic focus allows companies to better handle the local regulatory and political situation; Foster likes Randgold (NASDAQ:GOLD), which operates mostly in west Africa and has one of the most successful discovery track records in the industry.
- Rounding out Foster's five favorites: B2Gold (NYSEMKT:BTG), Eldorado Gold (NYSE:EGO) and Torex Gold Resources (OTCPK:TORXF).
Mon, Nov. 10, 8:02 AM
Mon, Oct. 6, 10:50 AM
- Rio Alto Mining (RIOM +3.7%) says its La Arena Gold Mine produced 56,368 oz. of gold during Q3, down 4.7% from 59,157 oz. in the year-ago quarter, due to both lower ore production and a decline in grade of 0.11 gold/ton.
- Mine output totals 164,347 gold oz. YTD, compared with 143,940 gold oz. for the same nine month period a year ago.
- RIOM maintains its previous FY 2014 gold production guidance of 200K-220K oz. of gold.
Thu, Aug. 14, 7:50 AM
- Net income of $15.2M, or $0.09 per share vs. a net loss of $3.3MM, or ($0.02) per share for the second quarter of 2013.
- Gold produced was 54,517 ounces, of which 50,830 ounces were sold at an average realized price of $1,276 per ounce.
- Cash provided by operations for the quarter amounted to $22.4M.
- Q2 results
Thu, Aug. 14, 7:20 AM
Wed, Aug. 6, 7:31 AM
- Rio Alto Mining (NYSE:RIOM) has completed its acquisition of all issued and outstanding common shares of Sulliden (OTCQX:SDDDF).
- As part of the merger, CEO of Sulliden Peter Tagliamonte and Director of Sulliden Bruce Humphrey will join the Board of Directors of Rio Alto.
- Previously: Rio Alto Mining, Sulliden Gold plan to merge
Tue, Jul. 8, 8:32 AM
- Rio Alto Mining (RIOM) says it produced 54,517 oz. of gold from its La Arena gold mine in Peru during Q2, up 12.5% Y/Y, and produced 107,979 oz. YTD, up 27.3% Y/Y.
- RIOM says Q2 gold production came in below expectations due to negative grade difference of 0.15 gram/ton vs. budgeted grade mined.
- Maintains its previous gold production guidance of 200K-220K oz. of gold in FY 2014.
Mon, Jun. 16, 8:57 AM| Comment!
Thu, May. 29, 7:50 AM| 1 Comment
Wed, May. 21, 12:47 PM
Wed, May. 21, 8:28 AM
- Rio Alto Mining (RIOM) and Sulliden Gold (SDDDF) agree to merge, in a deal valued at ~C$300M, creating a gold miner focused on Peru.
- The merger would combine RIOM's La Arena gold oxide mine and adjoining sulphide copper-gold deposit in Peru with Sulliden's Shahuindo gold development project located in the northern part of the country.
- The two companies say the combination will result in near-term production potential of ~300K oz/year of gold.
- RIOM +6.1% premarket.
Fri, May. 9, 8:46 AM
Nov. 13, 2013, 8:22 AM
Sep. 16, 2013, 12:46 PM
Jun. 20, 2013, 12:45 PM
Jun. 4, 2013, 9:40 AMRio Alto Mining (RIOM -4.1%) temporarily suspends mining activities at its La Arena Gold Oxide Mine in Peru due to a blockade of the Trujillo to Huamachuco public road, the main access route for people and supplies. RIOM says 2013 total gold production may be negatively impacted due to the situation. | Comment!
RIOM vs. ETF Alternatives
Rio Alto Mining Ltd is a Canadian based resource company. It is engaged in the development of the 21,000 ha La Arena gold / copper project, located in north central Peru, the prolific gold mining district in the country.
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