SA News • Thu, Dec. 18
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What It Really Costs To Mine Gold: The Alamos Gold Third Quarter Edition
- Alamos Gold saw its core and core non-tax costs jump in the third quarter to the highest levels of 2014.
- Some of it was due to the extraordinary rainfall seen in Mexico that diluted the gold recovery solution, but this shouldn't sugar-coat a poor quarter.
- Alamos Gold's value lies in what it will do next and that is what investors should pay particular attention.
Alamos Gold Is A Debt-Free Gold Producer; Solid Growth Prospects In MexicoChristopher De Sousa • Sat, Nov. 22
- Alamos Gold missed earnings and revenues estimates because of torrential downpours in Mexico.
- Alamos Gold is a debt-free gold producer, with a solid $3.32 per share working capital position.
- We estimate Alamos Gold to report solid revenues for the fourth quarter and for the fiscal year.
- Alamos Gold reported a decline in gold production and a spike in costs due to a large amount of rainfall.
- There are extenuating circumstances, and production was merely delayed.
- I had not anticipated this in my May article.
- Alamos' Mulatos Project is turning around and much of the company's value is in its pipeline and in its cash, making this a long-term "buy".
- Alamos Gold just reported third quarter results, which were very disappointing.
- The company produced just 28,000 ounces of gold at all-in sustaining costs of $1,148, which is much higher than expected; the company lost $2.2 million or $.02 a share.
- Costs were higher due to "severe rainy season" that diluted grades and resulted in deferral of production to the fourth quarter.
- However, the fourth quarter should be much better as the company has stacked 51,900 ounces to the leach pad.
Alamos Gold: An Attractive Valuation, Long-Term Growth Potential
- Alamos Gold is a mid-tier mining company with a $1 billion valuation and nearly $400 million in net cash.
- The company's main asset is the high-margin Mulatos gold mine in Mexico, which should produce 150,000+ ounces of gold at sub-$1,000 costs for full-year 2014.
- I love Alamos' development projects, mainly the Esperanza project in Mexico and the Kirazli and Agi Dagi projects in Turkey. These projects are fully-funded by Alamos.
- With an enterprise value of $600 million, I don't think the market is placing enough value on Alamos' assets and I think the stock is a buy here.
Update: Alamos Gold Declares $0.10/Share Semi-Annual Dividend
- Alamos Gold intends to pay shareholders a $0.10/share semi-annual dividend, or about 2.5%, despite recent weak performance at its Mulatos project.
- While I didn't mention this in May, it was to be expected.
- The company has a strong capital position, and weakness at Mulatos is likely temporary.
- The key, however, is its fully financed pipeline of projects, and as a consequence, I remain optimistic.
Update: Alamos Gold Announces Its Dividend Payment--Impact To My ThesisChristopher F. Davis • Tue, Sep. 30
- Alamos Gold has just declared its semi-annual dividend of $0.10 which is the company’s tenth consecutive semi-annual dividend.
- When I last opined on this little known gold miner, I had cited its impressive performance and its commitment to its dividend as reasons to own the stock.
- Despite my original thesis having yet to play out, the present dividend announcement has me bullish on the name.
- Alamos Gold recently received approval for its Agi Dagi project which shows the Turkish government is still mining friendly.
- This means that we believe there is a good chance the company's legal issues surrounding the more important Kirazli project will also be settled.
- Investors looking to front-run the anticipated fourth quarter decision may want to acquire shares now because we believe the Turkish government will not unduly hold up the Kirazli project.
Update: Alamos Gold Gets Its EIA Approved For Its Agi Dagi Project In TurkeyBen Kramer-Miller • Wed, Aug. 20
- Alamos Gold Announced that the Turkish Ministry of Environment and Urbanization signed off on the company's Environmental Impact Assessment (EIA) for its Agi Dagi Project.
- This fits with my May projection that the company will bring the Agi Dagi Project into production in late 2016/early 2017--18 months after the adjacent Kirazli Project begins producing.
- This is good news, especially given the company's Mulatos Project has been performing terribly with lower production and higher costs: this should shift emphasis onto the company's other assets.
What It Really Costs To Mine Gold: The Alamos Gold Second Quarter EditionHebba Investments • Sun, Aug. 17
- Alamos’s costs on both a core and a core non-tax basis have risen significantly compared to its first quarter costs.
- The company's gold production continues to drop from its Mulatos mine and it is one pace for its third year of declining production.
- The company needs to increase production by either improving Mulatos results or through development of its Turkish properties.
- Alamos Gold reported earnings of $0.7 million on rising production costs and a decline in production.
- While I had anticipated this costs rose and production declined more than expected.
- The company remains fairly valued given its strong cash position and development pipeline, although there are better opportunities out there.
- Mexico has seen a massive increase in gold production over the last 10 years.
- First movers like Alamos Gold have really benefited.
- Alamos' Mulatos mine is one of Mexico's finest gold mines.
- Alamos has an awesome growth pipeline.
- Alamos Gold has been one of the worst performing gold stocks year to date.
- Catalysts for the decline have included higher costs, lower production, and higher taxes.
- However much of the company's value is in development-stage projects, which the company can easily finance.
- While the company hasn't yet reached a buy-point from a conservative DCF standpoint, management's track record of execution and the upside potential of the company's projects make the stock attractive.
- Longer term investors should therefore look for opportunities to accumulate on weakness.
Alamos Gold: A Beaten-Down Gold Miner That Will Soon Catch Up To Its Peers
- Alamos Gold's innovative switch from owner-operated mining to contract mining should significantly lessen the company's 2014 tax burden from 51% to 35%.
- A strong balance sheet allows Alamos to go shopping in the beaten up junior mining sector to accrue reserves for a fraction of what these companies sold for during gold's.
- The Kirazli project has a high probability of having its injunction removed and proceeding towards full permitting which would add close to 70% to Alamos's annual gold production.
Alamos Gold Is A Screaming Buy, Even At $1,300 Gold
Thu, Dec. 18, 5:39 PM
Wed, Dec. 10, 5:39 PM
Mon, Dec. 8, 5:41 PM
Fri, Nov. 28, 1:21 PM
- Already hit hard over the last two years by declining prices, gold and silver miners saw more pain today as commodity stocks in general got hammered thanks to OPEC's decision not to slash crude production.
- Decliners: ABX -8%. GG -6.1%. AUY -9.8%. KGC -8.2%. GFI -9.9%. SLW -7%. NEM -5.8%. AGI -6.9%. PAAS -9%. AG -15.4%. SSRI -11.6%. CDE -11.4%. HL -8.8%. TAHO -7.8%.
- Previous: Precious metals slide alongside oil; Swiss vote ahead
Tue, Nov. 18, 3:59 PM
- Gold prices jumped 1.2% to settle just shy of $1,200/oz. as the dollar eased against major currencies amid tensions in eastern Europe and the Middle East, and some observers are starting to ask if gold mining and production stocks (GDX +4.8%) have finally found a bottom.
- 24/7's Chris Lange thinks gold giants may have hit their lows on Nov. 5, followed by an impressive recovery since that date with gold fundamentals apparently not changing drastically.
- Major precious metals miners are strong across the board: ABX +6.5%, AEM +4.4%, AU +6.2%, GG +3.7%, GFI +7.6%, SLW +3.6%, NEM +3.4%, AGI +4.9%, IAG +6.6%, AUY +6.8%, KGC +9.2%, NGD +2.8%, GOLD +1.9%, RGLD +3.7%.
- Other ETFs: GDXJ, NUGT, DUST, SIL, JNUG, GLDX, JDST, SLVP, SILJ, RING, SGDM, PSAU
Fri, Nov. 14, 10:58 AM
- The gold market will enter deficit by 2016 as producers cut capex, resulting in reduced supply in the medium- to long-term, Credit Suisse analyst Anita Soni writes, seeing 2014 as a likely plateau for supply (Briefing.com).
- Agnico Eagle Mines (AEM +2.6%) and Eldorado Gold (EGO +4.5%) are the firm's top picks among gold miners under coverage.
- Other Outperform rated gold companies are GG, KGC, AUY, AUQ, FNV, GSS and IAG; rated Neutral are ABX, NEM, NGD and AGI.
Wed, Nov. 5, 11:38 AM
- Spot gold skids to its lowest since April 2010 at $1,137/oz., below production costs for seven of 19 mining companies tracked by Bloomberg, including Harmony Gold (HMY -1.8%) and Primero Mining (PPP -2%).
- Harmony Gold said in its Q3 earnings report that all-in sustaining costs were $1,245/oz., while Primero reported all-in sustaining costs of $1,228; the most recent data from DRDGold (DRD -6.3%), AuRico Gold (AUQ +0.6%), Golden Star Resources (GSS +0.1%) and Alamos Gold (AGI -0.5%) also show costs higher than current prices.
- Maison Placements Canada brokerage's John Ing says a "two-tier type of market" is developing, where one tier of companies having solid assets and lower costs and another group saddled with high-cost operations and stretched balance sheets.
- ETFs: GDX, GDXJ, NUGT, DUST, SIL, JNUG, GLDX, JDST, SLVP, SILJ, RING, SGDM, PSAU
Fri, Oct. 31, 11:35 AM
- Precious metals miners are slammed for a third straight session as gold prices plunged to multiyear lows.
- Japan’s surprise stimulus move is supporting the U.S. dollar and driving the ICE U.S. Dollar index to a four-year high, making gold more expensive to overseas buyers; while the prospect for more monetary stimulus usually increases the lure of gold, the threat of global deflation has withered gold’s appeal as a hedge against rising prices, Barron's Chris Dieterich explains.
- Nearly everyone in the sector is hitting 52-week lows (again): ABX -4.5%, NEM -7.7%, GG -0.5%, SLW -3.6%, AGI -5.8%, AEM -4.1%, AUY -10.6%, IAG -4.6%, KGC -16.2%, NGD -6.1%, AU -2%, GOLD -1.6%.
- Also: GFI -7.4%, RGLD -3.8%.
- ETFs: GDX, GDXJ, NUGT, DUST, SIL, JNUG, GLDX, JDST, SLVP, RING, SGDM, PSAU
Thu, Oct. 9, 3:58 PM
- The price of gold may be rising, but gold mining stocks are getting hammered today; after all, "they are still stocks," Barron's Johanna Bennett writes.
- Gold prices rallied today to $1,234/oz., their highest level since Sept. 23, a day after the dovish minutes from the Fed’s September policy meeting excited gold bugs, but shares of the mining companies are falling along with the broader market selloff.
- Among the top mining names: IAG -6.9%, KGC -6.2%, SLW -5.9%, NGD -5.5%, AU -4.9%, GG -4.7%, ABX -3.9%, AUY -3.9%, GFI -2.8%, BTG -2.7%, RGLD -2.6%, AGI -2.1%, GOLD -1.8%.
- ETFs: GLD, SLV, GDX, GDXJ, NUGT, AGQ, IAU, DUST, SIL, USLV, SIVR, JNUG, SGOL, ZSL, UGL, GLDX, DGP, GLL, UGLD, DZZ, JDST, SLVO, GLDI, DSLV, SLVP, DGL, DBS, SILJ, DGZ, RING, OUNZ, GGGG, DGLD, AGOL, SGDM, PSAU
Mon, Oct. 6, 2:45 PM
- Gold prices bounce off 15-month lows to reclaim $1,200/oz. as the dollar rally pauses, helping strengthen shares of precious metals miners: AU +4.4%, GFI +3%, IAG +1.9%, BTG +3%, GG +2.2%, NGD +1.5%, KGC +1.6%, AGI +1.6%, RGLD +1%, SLW +2.1%.
- Sterne Agee analysts Michael Dudas and Satyadeep Jain foresee gold and silver prices trending higher, with gold averaging $1,400/oz. in 2015 and $1,450 in 2016 and silver averaging $19 next year and $21 in 2016, as “global demand remains firm, liquidity remains ample and the dollar appears overbought.”
- With investor sentiment still skeptical, Sterne thinks any supportive macro news flow could provide fuel for a rally; the firm rate Newmont Mining (NEM +1.5%), Agnico-Eagle Mines (AEM +2.4%), Coeur Mining (CDE +1.3%) and Gold Resource (GORO +0.2%) as Buys, with Barrick Gold (ABX +0.5%), Hecla Mining (HL +4.3%) and Pan American Silver (PAAS +1.5%) rated Neutral.
- ETFs: GLD, SLV, AGQ, IAU, USLV, SIVR, SGOL, ZSL, UGL, DGP, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, DGL, DBS, DGZ, OUNZ, DGLD, AGOL, DBP, TBAR, USV, UBG, JJP, GLDE, BAR, GYEN, GEUR, RGRP, BARS, GGBP, BLNG
Mon, Jul. 14, 11:29 AM
- Precious metals miners are broadly lower as gold futures head for their biggest daily drop of 2014, plunging $29.30, or 2.2%, to $1,308.10/oz.
- Physical demand has remained short of expectations, Commerzbank's Eugen Weinberg says, and India's decision to maintain a 10% import duty on gold and silver likely will dampen future gold demand expectations from the country.
- Barclays, which expects gold to drop to $1,200/oz. by Q3, also expresses caution, saying recent gains across the metals complex look toppy.
- ABX -1.2%, NEM -1.7%, GG -2.4%, KGC -1.8%, AEM -1.4%, AUY -1.4%, EGO -3%, NGD -2.8%, FNV -2.4%, AGI -2.6%, AU -2.2%, IAG -1.9%, GFI -3.4%, BTG -2.1%, NG -0.7%, SLW -2.1%.
- ETFs: GLD, SLV, GDX, NUGT, AGQ, IAU, DUST, SIL, USLV, SIVR, SGOL, ZSL, UGL, DGP, GLDX, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, SLVP, DGL, DBS, GLTR, DGZ, RING, AGOL, DGLD, OUNZ, DBP, GGGG, WITE, PSAU, TBAR, USV, UBG, JJP, GLDE, GYEN, GLDL, RGRP, GLDS, GEUR, GGBP, BLNG
Thu, Jun. 19, 3:35 PM
- Beaten-up gold miner stocks are strong across the board as precious metal prices move sharply higher and take out key technical resistance levels; Comex gold jumped $41.40 (+3.3%) to settle at $1,314.10/oz., the highest level since April 14, and silver added $0.87 (+4.4%) to end at $20.65/oz..
- Among today's winners: EGO +8.5%, AGI +8.5%, BTG +8.1%, SBGL +8.1%, SLW +5.5%, AUY +5.3%, AUY +5.2%, KGC +5.2%, GG +4.8%, NG +4.4%, AU +4.1%, ANV +4%, GFI +3.8%, ABX +3.2%, NEM +2.8%, IAG +1.7%.
Tue, Apr. 22, 7:55 AM
- Gold and silver equities now appear more fairly valued, Goldman Sachs says, raising its sector coverage view to Neutral as it sees more responsible capital allocation, successful cost cutting initiatives, a refocus on maximizing free cash flow, and sound strategic portfolio optimization improving the positioning of select companies and offsetting its below-consensus outlook for commodity prices ($1,200/oz. gold from 2015 forward).
- The firm upgrades Barrick Gold (ABX) to Buy, believing the company's financial flexibility has significantly improved; ABX +1.8% premarket.
- B2Gold (BTG) is initiated with a Buy rating and C$4.20 price target, as Goldman cites imminent production growth from the Otjikoto project which enhances BTG’s free cash flow generation and should fund future development.
- Started at Neutral: AGI, FNV, BVN,.
- Maintained at Buy: GG, AUY, SLV.
- Sell: IAG, EGO, PAAS.
- ETFs: GDX, GDXJ, NUGT, DUST, SIL, GLDX, JNUG, SLVP, RING, SILJ, JDST, GGGG, PSAU
Mon, Mar. 3, 9:55 AM
- Gold futures are surging in the wake of the crisis in Ukraine, and that's giving precious metals miners a big boost in early trading.
- AU +5.2%, GOLD +5%, GFI +4.6%, MUX +4.1%, BVN +3.9%, MVG +3.6%, SSRI +3.3%, IAG +3.2%, BTG +3.1%, HMY +3.1%, EXK +3.1%, ABX +2.8%, AUY +2.8%, SA +2.8%, SLW +2.7%, GG +2.7%, NEM +2.6%, HL +2.6%, KGC +2.3%, AGI +2.2%, AG +1.9%, NG +1.9%, PPP +1.8%, AUQ +1.6%, PAAS +1.2%, NGD +1%.
- ETFs: GDX, GDXJ, NUGT, DUST, SIL, GLDX, JNUG, SLVP, RING, SILJ, GGGG, JDST, PSAU
Thu, Jan. 16, 12:47 PM
Fri, Jan. 10, 3:49 PM
- Gold futures settle at a four-week high, rising 1.4% to $1,246.90, as the surprisingly weak jobs report reopens debate over the pace of bond buying at the Fed; precious metals miners are far outpacing the broader market, with the top gold miner ETF (GDX) surging 3%.
- Among the top miners: ABX +2.3%, GG +3.3%, NEM +2.4%, AU +3.8%, KGC +1.3%, GFI +4.3%, AUY +2.8%, RGLD +5.3%, AGI +2%, AEM +4.5%, SLW +4.4%, IAG +1.9%, FNV +1.5%, CDE +2.3%, EGO +3.8%, NGD +2.9%, NG +6.9%, HMY +2.7%.
- ETFs: GDXJ, NUGT, DUST, SIL, GLDX, SLVP, RING, GGGG, SILJ, JNUG, PSAU, JDST.
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