Elgin Mining Inc ELGMF

Still a Bargain

[HonestAbe]

If this gold rally is for real and we have bottomed in the mining sector last week then ELG will turn out to be one of the biggest bargains at current prices.  I think it will lag behind the leaders in the sector but there will be a catch up period.  The stock is still only up 10% from its lows even as of today!  If it takes out the asks at 72 to 75 cents level then it should swiftly trade back in the 85 cents range again.

 

You are looking at a potential 150K ounce producer within two years that likely requires minimal capex to achieve it.  At $1600 gold that results in $240M revenue.  There are not too many gold producers that even trade for 1x revenue except for instances where something is wrong and 1x revenue would be dirt cheap.  $240M market cap would be $1.62/share (148M shares outstanding) or $1.25/share (assuming 191M out due to warrants exercising at $1.30).  Current market cap about $100M for a 45K ounce high cost producer.

 

Reduce costs at Bjorkdal to the $800-$850 range and bring on Lupin production and you get a very interesting situation.  It is possible since new management already sees ways to minimize underground ore dilution and they will be integrating the new high grade discovery zone announced in April in the not too distant future.

[rob2000]

I am holding for the long term with this one.  Our value will increase doubly once the warrants come closer to the money.

[boreps]

Comments from visitor of Vancuver conference posted on Sabina board:   "I happened to stumble on a presentation by some guys reopening the Lupin mine. Elgin I believe they are called. (I could have gotten that name wrong, I'll double check and post again if I got it wrong) They told me the phone was ringing off the hook with people inquiring about jobs, that people love working up