Value Microcaps Junior Miners

[Lone Clone]

OGC, CEE

We already knew Q3 was going to be tough for Oceanagold aka OGC due to mine sequencing at Halle in the US and mill repairs at Macraes in New Zealand, and now we get the numbers. In Q3 OGC produced 99028 oz Au, due to lower amounts milled plus lower grades, as well as 3413t Cu. Gold production was down 24% from Q2, and cash costs rose from $725/oz Au in Q2 to $1003 in Q3. All that said, they are still on track to meet the lower end of guidance for 2023, and with mill repairs completed and underground mining having begun at Haile, Q4 looks like it will be strong.

As a result of these operational issues, OGC posted a small loss in Q3, but in spite of repaying $15M in debt and a dividend during the quarter, they remain in good shape financially with $60.3M cash vs. debt of $135M, lots of room on the credit line, and a return to strong cash generation ahead.

https://www.siliconinvestor.com/readmsg.aspx?msgid=34460743

FWIW, in the wake of these quarterlies BMO issued a new analyst report noting that Q3 was weak as expected but, expecting a strong rebound in Q4/Q1 they kept OGC at Outperform with a target of $4.25.

Also, in the wake of last week's release by Centamin aka CEE of an updated Life of Mine Plan for their Sukari property in Egypt, BMO released a new analyst report raising CEE from Market Perform to Outperform and raised their target from $C2.05 to $2.36, citing the increased attractiveness of the asset plus further upside possibilities.

Saville points out how strong the price of gold has been in the face of the US 10-year TIPS yield making a new 14-year high. However, he does opine that all the recent gains in the PoG, largely the result of politics and war, will be given back before year end, and that only when the TIPS yield starts to decline will it break out to a new ATH, likely during the first half of next year. Such a move is being presaged by gold making new highs in lesser currencies like the Euro.