RE:Back to Detour!Goldbug52 wrote: If Detour was capable of generating 40% of KL's free cash flow with only two month's production, it's plausible that with a full qtr it could produce 50%. How is that possible?
Detour producing as much free cash as Fosterville, Macassa and the Holt Complex combined surely puts to rest MPG's thesis and his "Swan" song :-)).
Barrick, MPG's horse of the moment produced $486 million of free cash in the first qtr. KL produced almost $200 million, so, almost 40% of Barrick's. Barrick's market cap is about $63 billion Cdn. KL's is about $15 billion. If we were to be judged on the basis of free cash flow I think we should be at approximately 40% of Barrick's market cap. or $25 billion or 60% higher than we are now. ( Market caps off Stockhouse )
You're a smart guy MPG (when you're sober). How did Detour produce almost as much free cash as all of KL's other mines combined? I'm not too smart, not as much as you are anyway:-)). So what's the answer?
Here's the way I look at it. Whats the production profile for the next say 2 years for KL? Dgc remains constant because it will take 2 years and more to increase production, Macassa no change until the new shaft is operational, and Fosterville steady as she goes and then off a cliff unless something changes. The only near term thing they can do to change this is buyback shares or buyout another producer with cash. It will also move higher with a higher pog but so will other producers. The dgc transaction is great longer term. Short term it reduces eps, and cash flow PER SHARE. But to each his own.
Through good luck and hard work they found a golden egg. When the golden egg is gone they are just another miner but with good hunting ground to find another golden egg.
TT