Elgin Mining Inc ELGMF

RE: Look at Sabina...

[HonestAbe]

Recent higher volume trading at prices near 52-week lows indicate that Q2 results will likely be brutal.  I suspect it will be continued cost creep at Bjorkdal that cannot be contained with the end result after adding in the non-cash depreciation and amortization that they are either barely breaking even or even losing money with the softer gold price.  I think Elgin management's original vision was correct and sound, which was to acquire an existing junior gold producer for immediate cash flow and potential upwards rerating of their shares as they progress with their other development asset.  Unfortunately, they likely failed at the execution because they picked the wrong junior producer to acquire ... high cost, limited growth, small production base ... and now I doubt they are even generating much in the way of cash flow from it.  Even worse, the merger has caused a downwards rerating of their shares which is likely the exact opposite of their original intentions!

 

No wonder all of the recent insider selling came solely from previous GOZ management!  It really is unfortunate because now worst case is a continued neutral to negative drift for the next eighteen months until early 2014 for the restart of Lupin.