How can you buy this company?I understand that I will become very unpopular. But after reading the BMO quarter report which is only recommending being overweight the companies that they have "disclosures in" = economic interest, I really need to express myself in some way...
NewGold is my view the most expensive company by far of the midtier producers of 200-400k ounce and I will gladly motivate that.
1. MCap of 1500 million C$, debt and treasury about the same.
2. The three mines to small to be attractive for any larger company removes the chance of a buyout. (The kind of mines that Yamana divested)
3. Clearly very specific company risks jurisdiction risk as we have seen recently.
4. 300k ounce producer at quite high total cash cost (BMO 600 usd for 2011)
5. 330k ounce hedged at 801 USD and no plans to remove them anytime soon.
6. No net treasury to finance growth to 380k ounce which seem to be the goal for 2012 (treasury about equals debts) should lots of financings (more disclosures...)
I would never short a gold company in a bull market. I do not know how to do it... I am just curious and to be honest upset how BMO can have this company as a market outperform at 1500 mcad MCAP...
Ok, nobody likes negative writing about their own holding but maybe some like to talk and explain how you are thinking when you pay 1500 mcad for this producer of 300k ounces?
To be honest, I have seen others besides BMO recommending it so maybe you can tell me what I am missing here..
Or you can put me on ignore. I can live with that.