Kinross Gold Corp T.K

Lazy ANALyst at RBC Capital Mkts misses on KGC Dixie purchas

[Goodtoreadthis1]

As a GBR stockholder I relished Chris Taylor's periodic valuations of Dixie which were ALWAYS highly detailed and packaged with incredible numbers of FACTS. The RBC ANALyst covering KGC obviously was NOT paying attention to Chris Taylor's periodic reports on Dixie's value. 

Chris pummeled us with the fact that Dixie was showing itself -by drill results -to be TWICE as big as HEMLO which to date has produced 21 million OZ of gold.  CT told us that gold STARTED at the edge of the 8 foot deep gravel pit, while Hemlo gold started 100s of meters below surface. Hemlo is STILL producing thousands of OZ many many years after going into production. 

An excerpt from the highly questionable RBC report reads like this- RBC calculates that Dixie's ultimate success as a 500,000-ounce operation at all-in sustaining costs of $700/oz over either a 15- or 25-year timeframe, with capital and timelines consistent with management guidance yielding a 6-8% IRR to Kinross at $1,500/oz. Dixie's net present value, discounted at 10%, was estimated at $700 million. 

Chris T has already told us that HEMLO is likely to have 42 mil oz of gold over system life. Does anyone know or expect to know anyone who will sell them an OZ of gold today or in 2029 when Dixie starts producing -- for $1500 an OZ ?  Using that number makes RBC's report pure nonsense. If annual Dixie production is 500,000 OZ and AISC is $700 an OZ  with today's gold at $1780, we have an annual Dixie profit of  $525 mil  for 15 or 25 years which comes to  7.8 Bil or  $13 .1 Billion. 

Credit Suisse pointed out that only 10% of the Dixie property has been drilled to date. 

So KGC is swapping $1.4 Bill of todays dollars for either $7.8 Bill or $13.1 Bill NET PROFIT DOLLARS in the future and RBC values that as a negative for KGC .   It's seems the RBC guy just did not want to do a through job on this valuation which Chris Taylor had already done for him.  

[CountOfMeltedCrisco]

This is how RBC gets its retail Customers - you know, "The Muppets" - to puke their Shares to RBC's institutional Customers, all of whom you can be absolutely sure know the real story here. 

[byloselhir]

RBC says revised target of $6.50 US include the "higher operating costs related to Dixie which carry a high upfront price tag and limit the potential returns to kinross at $1500 US" "The project represents a high quality asset for future development but is very early stage with no resource or economics defined on the property so far" Cut the price target but then they put an