Lundin Gold: Time To Take Some Profits

Jan. 18, 2023 4:18 AM ETLundin Gold Inc. (LUG:CA), LUGDF3 Comments
Taylor Dart profile picture
Taylor Dart
26.72K Followers

Summary

  • Lundin Gold was one of the best-performing miners in 2022, up 19% for the year vs. a 12% decline in the Gold Miners Index.
  • This outperformance can be attributed to the company trouncing its initial guidance estimates, and the fact that reserve growth looks likely after blockbuster drill results released in Q4.
  • However, Lundin now trades at a lofty valuation, sitting at an enterprise value of $2.80 billion, above what NCM paid for Brucejack in what I'd consider an expensive deal.
  • So, while there's no disputing this is one of the best assets in the sector, and Lundin's execution has been near flawless, I see this rally above US$11.40 as an opportune time to book some profits.

Underground mining site

aeduard

2022 was a year to forget for most investors in the Gold Miners Index (GDX). This is because while many miners outperformed the S&P 500 (SPY), passive investors in miners had to suffer through violent drawdowns, and

Lundin Gold - Quarterly Production & Costs

Lundin Gold - Quarterly Production & Costs (Company Filings, Author's Chart)

Lundin Gold - Annual Production and 2023-2025 Outlook

Lundin Gold - Annual Production and 2023-2025 Outlook (Company Filings, Author's Chart)

LUGDF Daily Chart

LUGDF Daily Chart (StockCharts.com)

This article was written by

Taylor Dart profile picture
26.72K Followers
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Disclosure: I/we have a beneficial long position in the shares of AEM, GOLD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying small-cap precious metals stocks, position sizes should be limited to 5% or less of one's portfolio.

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