Allied Nevada Bonds
I think beyond the numbers which does look interesting, there are several key points to the decline, many of which is operational.
1) firm expected net cash costs to rise from $709/oz (1H 2013) to $800-825/oz (FY 2013)due to operational issues at Hycroft mine
2) Cash is $250m yes, but capex alone in 1H 2013 is already $200m. This is on top of a negative OCF.
3) firm also postponed their 130,000 tpd mill facility. The mill is a key component to firm's original target of 225k oz gold and 25.5m oz silver from 2015 to 2024.
4) Most importantly, the firm is a one mine, 2 product wonder. Risks are fairly concentrated.
And I havent gone into the covenants yet ..it seems though that they are nearing their covenant levels.
I personally wont buy it at 70cts for sure.
