Value Microcaps Junior Miners

[dr_airtime]

TGZ...good summary...

...however when I got in all that was in the past and they announced a solid Q4-2013 with sector low AISC which supported analyst targets for post-tax, post-FNV gold stream repayment NAV of $1.30-$1.50 based on the new mine plan.

Hard to believe we walked all the way back down from almost $1.20 but market needs to see sustained bull run in gold which they are guessing won't happen over next couple months.

CFOps before changes in WC in Q1 was $18M for $72M annualized vs. $215M MC so about 3X MC/CFOps so getting cheaper.

If you look at Q1 they hardly had any capex (CFInv).

It's debatable how you look at EV with the FNV gold stream (recorded as deferred revenue) but since CFOps is post-gold stream repayment you could just compare CFOps to MC (equity value of company)plus net debt (ignore FNV deferred revenue) - call this "Adjusted Equity". At Mar-30 they had $28M of cash less $35M of historical borrowings 7M of net debt. Since they just closed the $30M PP they technically have $23M in cash (negative net debt) so Adjusted Equity is now $192M.

Compare this non-FNV Adjusted Equity to a post-FNV-stream repayment metric like CFOps and you get a (192/72) 2.7X.

Getting cheaper. They also only produced 52k oz in Q1 but are guiding for 220-240k oz in 2014 so this should average 55-60k/quarter so Q1 should be the worst of the year. Should do more like $80M+ in CFOps in 2013 at $1300 gold.

They are cheaper than Timmins anyways (TMM.TO/TGD - $241M MC in $CAD today) with much better long term fundamentals and more reserve ounces as an alternative for a low AISC producer with most of their capex spent.

I'm holding but scolding myself for not taking profits and then reloading. C'est la vie.