High River Gold Mines Ltd HRIVF

Just sent to HRG database

[ccharlwood]

HRG Q1 $27M profit, Olma Target $1.82.

Olma Investment Company has increased its target price of High River Gold to $1.82 based on the Q1 2010 results – a 117% increase from today’s share price. Production problems (seen to be as one time) caused production to drop to 77.8K oz from 94.6k oz in Q4. However, the company was able to retain much of its previous quarter’s profit ($27.3M versus $31.6M in Q4) due to cost controls. HRG has reduced its debt down to $62.6M and is expected to pass the tests with Royal Gold to release its third party investments as collateral. Olma shows the company as having a negative net debt (surplus) of $19.9M.

Things to look forward to?
1. Royal Gold to release 3rd party investments of $78.4M (current values).
2. Bissa Feasability study completion with multi million oz potential.
3. Drilling program to extend mine life at Irokinda and Zun-Holba.
4. From Q1 MD&A; “The new mill at Berezitovy should enable increased production in the second half of 2010. Further operational improvements planned for Taparko may result in higher production in the second half of 2010.”
5. Q2 gold prices looking to be $1185/oz avg. compared to $1109/oz avg. in Q1.
6. Severstal Gold possibly announcing an IPO with market cap. in the $4.2B range. With HRG making up 63% of total production in Q1 (77.8k oz vs.123k oz), on a production basis only, this would value HRG at $2.65B or $3.31/share.

HRG has a very committed minority shareholder base with very little selling. However, HRG needs new investors buying shares to move the price up significantly. We are hoping that Severstal/HRG management will begin to promote the HRG story by pursuing research coverage from investment banks, presenting at mining and investment shows and hiring an Investor Relations firms.

Sources

HRG Q1 2010 results
https://finance.yahoo.com/news/High-River-Gold-Reports-First-ccn-816689089.html?x=0&.v=1

Olma Investment report
https://freepdfhosting.com/a74bb86fa9.pdf

Third party Investments
https://freepdfhosting.com/e367e467a0.pdf


Chris Charlwood
Retail Investor
[e-mail]
604-718-2668

[topoftheridge]

first off, thanks to ccharlwood for all you have done and continue to do.the olma report gives an estimate of 11 cents per share for 2010 earnings, thus a $1.82 target price.in the first quarter HRG made 3.5 cents per share, thus wouldn't you estimate 2010 earnings at more like 16 to 21 cents per share, therefore the $1.82 target on the low side?Also from the Olma report, HRG P/E is now 7

[NaturalCurrency]

Thanks to Charlwood, as always. I think Olma analysis @ 11 cents does assume a P/E closer to peers, though using earnings between 15 to 20 cents gives us a price between $2.5 to $3.5, the latter being closer to what Severstal is thinking our value should be.Interesting times ahead.