TSX:LSG.DB - Post by User
Post by
MestQalanderon Mar 13, 2015 9:07am
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Post# 23517380
LSG Outlook
LSG Outlook LAKE SHORE GOLD CORP. (LSG)
Lake Shore Gold is a gold mining company.
52-Week Range: $0.60-$1.28
Let’s get the bad news out of the way first. Over the past trailing twelve months, Lake Shore Gold has a profit margin of negative 75% and a return-on-equity of negative 35%. This isn’t going to excite many investors. On the other hand, fixable situations (that are actually fixable) present the biggest opportunities — if that company does manage turn it around, the stock price appreciation will be substantial.
The good news is that preliminary cash operating cost per ounce came in at $595 for 2014, versus a previous expectation of $675-$755 per ounce. These lower costs have helped drive free cash flow, which can be put to use advancing new discoveries. (For related reading, see: Does Warren Buffett Invest in Gold? Why or Why Not?)
Lake Shore Gold is very focused on costs. In 2014, it strengthened its balance sheet, which included $26 million in cash and bullion, while repaying $45 million in debt. It currently has $60 million in cash and billion with its senior secured debt only $7 million.
This is a good speculative play, but you still need to be careful with any company that’s trading below $5, let alone below $1. Remember, the company is not profitable.