Friday, June 16, 2017 1:56:27 PM
Relax, Gold and Silver Investors. So the Fed Raised Rates -- No Big Deal!
Motley Fools...
https://www.fool.com/investing/2017/06/15/relax-gold-and-silver-investors-so-the-fed-raised.aspx?yptr=yahoo
Yamana Gold (NYSE:AUY) as a good example. Since nearly touching $6 per share in mid-July 2016, shares of Yamana have shed 58% of their value. But take a closer look at its expected production and cost improvements over the next two to three years, and there's little reason to be pessimistic.
Next year, both the Cerro Moro and C1 Santa Luz mines should be coming online, with Cerro Moro expected to deliver an average of 150,000 ounces of gold and 7.2 million ounces of silver over its first three years, and C1 Santa Luz an average of 114,000 ounces of gold over its 10-year mine life. By 2019, the Suruca development in the Chapada mine should yield another 45,000 to 60,000 ounces of gold annually for about five years. The result is Yamana is expected to generate $0.27 in annual EPS by 2019 and $0.88 in cash flow per share, yet it's trading at a mere $2.51 per share. That's exceptionally cheap.
Silver Standard Resources (NASDAQ:SSRI), which is a holding of mine, has also positioned itself for long-term success. Its acquisition of Claude Resources last year brought the low-cost, high ore-grade Seabee mine into its production portfolio, which compliments its Nevada-based Marigold mine well.
More recently, it worked out a joint venture with Golden Arrow Resources for the development of the Chinchillas Project. With open-pit mining having wound down at Silver Standard's San Miguel mine, this joint venture will provide a new, steady source of silver, once commissioned in 2018, for the next decade. If smart investors wait a year while Silver Standard and Golden Arrow ready the mine for production, they'll be rewarded with a company that could produce $1.38 in cash flow per share (CFPS) by 2020. With Silver Standard Resources near $9 a share and down more than a third from its 2016 high, and most mining stocks valued near 10 times their CFPS, it would appear to be inexpensive at its current levels.
Motley Fools...
https://www.fool.com/investing/2017/06/15/relax-gold-and-silver-investors-so-the-fed-raised.aspx?yptr=yahoo
Yamana Gold (NYSE:AUY) as a good example. Since nearly touching $6 per share in mid-July 2016, shares of Yamana have shed 58% of their value. But take a closer look at its expected production and cost improvements over the next two to three years, and there's little reason to be pessimistic.
Next year, both the Cerro Moro and C1 Santa Luz mines should be coming online, with Cerro Moro expected to deliver an average of 150,000 ounces of gold and 7.2 million ounces of silver over its first three years, and C1 Santa Luz an average of 114,000 ounces of gold over its 10-year mine life. By 2019, the Suruca development in the Chapada mine should yield another 45,000 to 60,000 ounces of gold annually for about five years. The result is Yamana is expected to generate $0.27 in annual EPS by 2019 and $0.88 in cash flow per share, yet it's trading at a mere $2.51 per share. That's exceptionally cheap.
Silver Standard Resources (NASDAQ:SSRI), which is a holding of mine, has also positioned itself for long-term success. Its acquisition of Claude Resources last year brought the low-cost, high ore-grade Seabee mine into its production portfolio, which compliments its Nevada-based Marigold mine well.
More recently, it worked out a joint venture with Golden Arrow Resources for the development of the Chinchillas Project. With open-pit mining having wound down at Silver Standard's San Miguel mine, this joint venture will provide a new, steady source of silver, once commissioned in 2018, for the next decade. If smart investors wait a year while Silver Standard and Golden Arrow ready the mine for production, they'll be rewarded with a company that could produce $1.38 in cash flow per share (CFPS) by 2020. With Silver Standard Resources near $9 a share and down more than a third from its 2016 high, and most mining stocks valued near 10 times their CFPS, it would appear to be inexpensive at its current levels.
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