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Getting Real at Buritica
Some recent analytics from Daniel Earle:
There is significant upside relative to Daniel Earle's estimates for the PEA due in the next couple of weeks.
This comes at a convenient time, in his view, as CNL has underperformed during the recent correction in the sector without the support of an economic study to underpin its fundamental valuation.
The company released cross-cut and drifting results that positively surprised versus the resource, in Daniel Earle's view, suggesting greater potential for greater bulk mining and increasing head grade.
Daniel Earle believe these results were supported by his observation of a number of minor vein/veinlet orientations and zones of brecciation that are not captured in the current resource model around the primary veins, which account for 70% of resources – other areas were less impressive.
The company expects to finish the year with US$65mm of cash and for spending to decline dramatically next year, with major pre-construction expenditures essentially complete – next year it expects to update its resources and possibly its PEA in Q2/15E and complete permitting Q3/15E.
Daniel Earle calculates that Continental is currently trading at 0.27x his corporate NAV5% and he maintains the SPECULATIVE BUY recommendation and $6.00 target price.
Good luck to all!
Q3/14 Cash Costs In line; EPS Miss on Lower Realized Copper
Some recent news from analyst Daniel Earle:
Capstone reported Q3/14 financial results yesterday evening following the pre-release of production results on October 7
Daniel Earle estimated adjusted EPS of $0.03, below both TD at $0.05 and consensus of $0.06; the miss was due to a lower realized copper price and slightly higher treatment and selling costs versus Daniel Earle's estimates
CFPS of $0.15 was in line with both TD and consensus of $0.15
Copper production from the Cozamin, Pinto Valley and Minto mines totaled 26.2 kt at net cash costs of $1.84/lb in Q3/14; net cash costs were slightly lower than Daniel Earle's estimate of $1.89/lb due to lower unit costs at Minto
Guidance for 2014 remains unchanged at approximately 102 kt of copper at net cash costs of $1.90-$2.00/lb
The impact has been neutral.
Pinto Valley produced 15,819 tonnes of copper in concentrates and 650 tonnes of copper cathode at cash costs of $1.90/lb, in line with Daniel Earle's estimate of $1.89/lb.
As a reminder, on September 5 Capstone announced the launch of $300mm of Senior Notes maturing in 2022, to repay its two existing credit facilities, however due to weak general market conditions for debt financing, the company discontinued the effort.
Q3/14 Results In Line; Focus Now on Exploration
Recent information released by Daniel Earle
Lake Shore reported its Q3/14 financials - production and costs had been pre-reported on October 3 and October 9, respectivelyAdjusted EPS of $0.02 and CFPS of $0.06 were both in line with our estimate and consensus – when first announced, cash costs were better than we expected due to lower than expected site costs
Recall, total production was 45.6 koz from 3,490 tpd at 4.6 g/t, versus 52.3 koz from 3,400 tpd at 5.4 g/t in the prior quarter; Daniel Earle expected the grade to decrease in the quarter as it would trend towards the reserve grade
With 9M/14 production of 142.5 kozs and cash costs of US$588/oz (AISC of US$861/oz), the company appears to us to be on-track to beat its full year guidance of 160-180 kozs at US$675-US$775/oz (AISC of US$950-US$1050/oz)
Lake Shore increased its cash and bullion by approximately $14mm in Q3/14 to $67mm ($62mm in cash and $5mm in bullion), while repaying approximately $4.1mm of debt in Q3/14
Additional Drill Results at San Sebastián
This morning, Daniel Earle released a new reseach report for Endeavour.
The company announced additional exploration drilling results at its San Sebastián project in Jalisco State, Mexico. This mineralized zone reportedly extends over 1,400 m in length and remains wide open along strike and to some extent down dip. The company currently has one drill rig at San Sebastián and is targeting an updated resource estimate at the end of Q4/14E.
In other news, Endeavour also announced that it has now completed the purchase of a 100% interest in the La Bufa property (press release dated August 21); payment consisted of 85,587 common shares, together with a previous advance of US$19,000 plus 5% interest
Daniel Earle rates the company as neutral.
A recent summery of the drilling found, The Terronera vein is reportedly a large structure over 20 m wide that has been traced on surface for more than 2,800 m.
Recent drilling highlights from the Terronera vein include two parallel mineralized zones within the 28 m wide vein in hole TR12-3:
557 g/t Ag and 1.47 g/t Au (646 g/t AgEq) over 11.3 m true width, (including 6,940 g/t Ag and 6.93 g/t Au (7,356 g/t AgEq) over 0.4 m true width
1,605 g/t Ag and 2.77 g/t Au (1,772 g/t AgEq) over 8.3 m true width, (including 5,210 g/t Ag and 9.34 g/t Au (5,770 g/t AgEq) over 0.5 m true width,
Very exciting to see future projections from this company.
Additional Drill Results from Buritica
Analyst Daniel Earle has released research on Continental initial channel sampling results from both the main cross-cut and drift accessing the Veta Sur Vein System for its Buriticá (100%) gold project in Colombia.
To-date 800m of total underground development accessing Veta Sur has been completed (expected completion by the end of November 2014) and this program has provided Continental with its first ever underground access into the Veta Sur deposit.
Management indicated that its first underground sampling in the Veta Sur system has demonstrated the continuity of high-grade mineralization over widths greater than anticipated from the current mineral resource model (May 2014) and in provisional mine planning.
It is important to remember, the previously announced Preliminary Economic Assessment continues to be on track for completion in Q4/14E and the company's 60 km Phase V drill program is expected to be complete by year-end.
Daniel Earle also expects that the upcoming PEA will be based on resources.
In its most recent resource estimate dated May 2014, Buriticá was defined by a total of 7.0 Moz of gold at 8.7 g/t in all categories (M&I resources of 2.8 Moz at 10.4 g/t) at a 3.0 g/t cut-off. As of that date, the company's database included 578 surface and underground drill holes (203 km of drilling) and 3.7 km of channel sampling. Daniel Earle expects this resource to form the basis of the PEA in Q4/14, with the results of the Phase V drill program and important underground sampling to possibly be included in a subsequent economic study.
Daniel Earle reminded that Major Accesses are expected to be completed by the end of the year. The underground cross-cut through the Veta Sur deposit is progressing ahead of schedule, with approximately 255m of the planned 350m completed to date.
As a reminder, the 1.2km long Higabra Valley Tunnel was reportedly completed in late August and development of the Yaraguá Ramp is on track for completion by year-end, with the company having completed 91m out of 380m planned (as of October 6).
More news to come soon.
Good luck to all.
Potential Dividend for THO
Here's some recent equity research I found from analyst Daniel Earle.
With the ramp up of Escobal having exceeded nominal design rates, discussion re Tahoe has turned to the potential dividend, with questions as to its rate, timing and sustainability in the context of a recently-weak silver price
In Daniel Earle's view, it would be an incredible achievement for a single-mine company to institute a significant dividend in the first year of its commercial production – in fact, he cannot recall another example of this in recent history
As to the potential dividend, Ron Clayton, the company's President and COO, suggested at a conference this past September that a potential dividend of $0.04/mth (~2%) could be paid beginning in December or early 2015
The silver price has since declined a little over US$1/oz; however, Daniel Earle views the implied payout ratio as being feasible and broadly in keeping with that suggested previously by the company's CEO, Kevin McArthur
Daniel Earle's forecast production profile suggests that, with all things being equal, we should expect a flat dividend of $0.48/yr through 2016 and modest growth to $0.55/yr by 2018
Q3/14 Operating Results Below Expectations
Some recent equity research from Daniel Earle finds recent impact to be negative.
First Majestic announced Q3/14 production results this morning, announcing production of 3.52 Moz AgEq, which were below Daniel Earle's forecasts of 3.96 Moz AgEq.
Silver production totaled 2.68 Moz (vs previous estimates of 3.35 Moz) compared to 3.1 Moz in Q2/14, due to lower throughput rates at Del Toro and disruptions due to weather during the Mexican rainy season which affected the La Parrilla, San Martin and Del Toro mines
First Majestic has indicated that it has elected to temporarily suspend silver sales, and the inventory of unsold ounces are expected to be sold in Q4/14, according to the company (as of September 30, approximately 934 koz Ag were held in inventory)
According to Daniel Earle, the production results are negative compared to recent production results. The company processed a total of 621,196 tonnes in the quarter, representing a 7% decrease from Q2/14 due to lower throughput rates at Del Toro and disruptions due to weather during the Mexican rainy season which affected the La Parrilla, San Martin and Del Toro mines.
The average head grade decreased to 196 g/t Ag from 212 g/t Ag (down 7%) in Q2/14, primarily due to lower grades at La Encantada and combined silver recoveries remained flat at 68%. In an effort to cut costs, the company continues to trim its workforce (including contractors), as total personnel decreased to 3,800 employees (down 4% from Q2/14) and costs savings are expected to be realized in Q4/14
Q3/14 Production Statistics
Endeavour Silver reported Q3/14 production results this morning, announcing production of 1.63 Moz Ag and 14.1 koz Au, roughly in line with Daniel Earle's forecast of 1.65 Moz Ag, but below his gold production forecast of 18.8 koz Au, due to lower grades.
Production of 1.63 Moz Ag was down roughly 2% from 1.67 Moz Ag in Q2/14, while production of 14.1 koz Au was also down 7% from 15.1 koz in the prior quarter
Production of 2.4 Moz AgEq was slightly below Daniel Earle's forecast 2.8 Moz AgEq (Endeavour uses a 60:1 Ag:Au ratio)
Q3/14 financial results are expected to be released Monday November 10, pre-market, with the conference call at 1:00 PM on the same day
The company's 2014 guidance of 6.5-6.9 Moz Ag, remains unchanged
The impact is rated at Neural.
Endeavour's operating results in Q3/14 were slightly weaker than those of Q2/14, in Daniel Earle's view, as throughput and grades at El Cubo were lower than he anticipated. Silver production was roughly in line with Daniel Earle's estimates, however he anticipated slightly higher gold grades at Guanacevi, Bolanitos and El Cubo.
Guancevi operations – production was slightly better than he anticipated due to slightly higher grades and recoveries, while mill throughput was relatively flat.
Bolanitos operations – silver-equivalent production was essentially flat relative to Q2/14, in Daniel Earle's view, with gold grades slightly lower than he anticipated; mill throughput was flat at more or less plant capacity.
El Cubo operation – production was lower than he anticipated based on lower throughput and lower grades compared to Daniel Earle's estimates; grades continued to lag the reserve grade, and management indicated its focus on reducing dilution and accelerating mine development of its V-Ascuncion discovery to reduce costs and increase throughput and grades. The company also stated that it is evaluating various operating alternatives for El Cubo, under current market conditions.
Q3/14 Operating Results
The Q3/14 financial results are to be released after-market on Wednesday October 29, 2014, with the conference call the following day at 11:30 AM EST.
In comparison to the latest results released by Daniel Earle, Capstone mining reported Q3/14 production of 26.2 kt of copper (concentrate plus cathode), in line with his forecast of 26.0 kt. At Pinto Valley, throughput of 48.9 ktpd was in line with his forecast of 49.0 ktpd, while grades and recoveries of 0.39% Cu and 90.3% were in line with his expectations of 0.39% Cu and 89.1%, respectively. Guidance for 2014 remains unchanged at approximately 102 kt of copper at net cash costs of US$1.90-US$2.00 per payable pound Cu.
Guidance is being kept at Neutral.
At Pinto Valley, copper grades decreased during the quarter to 0.39% Cu from 0.46% Cu in Q2/14, while recoveries of 90.3% increased slightly from 89.1% in the prior quarter. Throughput increased to 48.9 ktpd from 45.7 ktpd in Q2/14, in line with Daniel Earle's expectations 49.0 ktpd. Daniel Earle expected incremental improvement in throughput to come largely from improving reliability in H2/14.
At Cozamin, recoveries were relatively flat 93.0% versus 92.7% the prior quarter; throughput and grades were 3.3 ktpd and 1.76% Cu respectively, lower than Daniel Earle's estimates of 3.5 ktpd and 1.85% Cu. The lower grades were reportedly due to the installation of additional ground support impacting the release of higher grade mining areas. Copper grades improved in September, slightly later than the company's 2014 mine plan, which expected grade returning to 1.85% Cu in H2/14.
At Minto, throughput and grade of 3.9 ktpd and 1.41% Cu respectively were in line with Daniel Earle's estimates of 4.0ktpd and 1.40% Cu; while recoveries of 93.8% was in line with the previous quarter of 94.2%. Daniel Earle noted that copper grades continue to fall (copper head grades in Q3/14 were 1.41% Cu, down from 1.45% Cu in Q2/14 and 1.59% Cu in Q1/14) as more stockpile than originally planned continued to be milled to maximize throughput; the company indicated processing in the fourth quarter will be from stockpile.
Some things to look forward to:
Permit for the operation of the port (Maritime Concession) – Q4/14E
Power agreement – H2/14
Approval of EIA (stage-gate)– Q1/15E
Engineering to advance to 60% to 65% (stage-gate) – Q3/15E
Engineering complete – Q1/16E
Production at Santo Domingo– H1/18E
Good luck to all!
Total Cash Costs of US$595/oz
Here's analyst Daniel Earle's short analysis of the preliminary Q3/14 cash costs that Lake Shore Gold Corp. reported.
As of now, Preliminary total cash costs in Q3/14 came in at US$595/oz (US$556/oz in Q2/14), while preliminary AISC were US$862/oz (US$784/oz in Q2/14); we expected total cash costs and AISC to increase, given that Daniel Earle believed the grade would trend towards the reserve grade.
On both measures, the company significantly beat its full year guidance for total cash costs of US$675-US$775/oz and AISC of US$950-US$1,050/oz; its year-to date preliminary total cash costs are US$588/oz and AISC are US$862/oz, which are 13% and 9% lower, respectively, than the low end of the company's guidance range.
The slight increase on costs comes from the lower grade in the quarter, but was in line of the reserve grade of 4.6 g/t; however the lower costs versus Daniel Earle's estimate appears to be because of lower than anticipated unit costs.
Lake Shore increased its cash and bullion by approximately $14mm in Q3/14 to $67mm (up from $53mm at the end of Q2/14), while repaying approximately $3mm of debt in the quarter ($20mm paid year-to-date).
We can expect the Q3/14 financial results to be released after-market on Wednesday, October 29, with the conference call at 2:00 PM, the following day.
More news to come then!
Updates on Potential New Zones
Daniel Earle has found exceptional results from first drill hole of a new program at the company's 144 property, approximately 770m southwest of its Timmins Mine. The hole was reported as 5.37 g/t over 46.0m, 775m below surface and 125m down dip of a prior hole (13.5 g/t over 2.0m, announced January 2013)
There is little to no other drilling below this elevation on the property and there are other examples on the property of zones that begin at significant depth with little expression above. Drilling is currently ongoing.
Daniel Earle rates the impact to be positive.
Additional drilling will be required to prove that a discovery has been made if indeed the intercept is part of a coherent deposit below – and that isn't necessarily the case. In the view of Daniel Earle, the fact that the property and this potential zone is open at depth and that other discoveries on the property have been made with little expression above is encouraging.
In a potential development scenario if it ever got to that stage, Daniel Earle believes the new zone would benefit greatly in terms of timeline and costs to potential production from the existing infrastructure of the Timmins Mine complex 770m or so to the northeast, which would offset some of the impact of the depth of the potential zone.
It is anticipated that Q3/14 Preliminary Costs Estimates will come out Early October 2014E and the Additional Drilling Results should be released at the end of 2014E.
Solid post regarding the recent Blackrock purchases. Could this bring the investor juice back to Wi-Lan?
WI-LAN (NASDAQ:WILN) declared a quarterly dividend on Friday, August 9th, AnalystRatingsNetwork reports. Investors of record on Friday, September 13th will be given a dividend of $0.0386 per share on Friday, October 4th. This represents a $0.15 dividend on an annualized basis and a yield of 4.50%. The ex-dividend date of this dividend is Wednesday, September 11th.
WILN has been the subject of a number of recent research reports. Analysts at Zacks downgraded shares of WI-LAN from a “neutral” rating to an “underperform” rating in a research note to investors on Thursday, July 25th. They now have a $3.60 price target on the stock. Finally, analysts at Clarus Securities reiterated a “buy” rating on shares of WI-LAN in a research note to investors on Friday, June 21st.
Shares of WI-LAN (NASDAQ:WILN) traded up 3.94% during mid-day trading on Friday, hitting $3.43. WI-LAN has a one year low of $3.15 and a one year high of $5.89. The stock’s 50-day moving average is currently $4.01. The company’s market cap is $416.9 million.
WI-LAN (NASDAQ:WILN) last posted its quarterly earnings results on Thursday, August 8th. The company reported ($0.01) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.01 by $0.02. The company had revenue of $19.90 million for the quarter, compared to the consensus estimate of $18.01 million. On average, analysts predict that WI-LAN will post $0.08 earnings per share for the current fiscal year.
Marc Frechette joining Wi-Lan is positive news. Frechette holds an impressive resume and track record from Acacia and his time as a patent lawyer. He is the second Acacia employee to join Wi-Lan since June.
Furthermore, an Acacia merger is being rumoured which can mean a large boost in the stock price. Acacia is a patent licencing firm that has been acting vigorously in court and just recently settled a case with Hewlett-Packard.
Alcatel also filed a motion dismissing its counsel. How long before Wi-Lan is able to appeal?
http://docs.justia.com/cases/federal/district-courts/texas/txedce/6:2010cv00521/125700/472/0.pdf?ts=1374553931
The case is still open.
The signing was indeed a step in the right direction.
What is the news regarding the appeal of the verdict? I'm patiently waiting to see what Wi-Lan's litigation team has in the works.
WiLAN also has upcoming suits against Comcast, Time Warner, and Charter Communications. Unlike the previous patent suit this one deals strictly with TV broadcasting. The dispute will be over a patent regarding the broadcasting of data to remote networks and computers, so we can be sure the loss against Alcatel-Lucent will not affect this suit in any way.