RE:RE:LSG vs NMI (to grammadux)I knew i could count on you to be the most critical :) That's good. No company is perfect and it's good to be aware of their weaknesses.
"Realized gold price for NMI in Q2 was close to $1200, right now Gold is at $1115"
Looking at the drop in $US gold price is meaningless to predict what will happen when their cost is in Australian dollars. H1 they sold gold at average A$1522. Current gold price as i write this is A$1518. Not much drop at all.
NMI Q1 AISC was $983. Q2 AISC was higher because of a temporary loss of two underground loaders that they have since replaced.
Annual guidance was made at the end of last year. They can't predict everything that happens, including the plunge in Australian dollar, oil, cyanide, and other input costs.
The Australian dollar was $0.7693 at the end of Q2. Current Australian dollar is 0.7366 well down from Q2. Oil and other costs have continued to plunge.
Q3 AISC will definitely be lower, regardless of guidance which they said was conservative.
Even with the higher AISC NMI has much better EPS and P/E than LSG.
"Both companies benefit from the devaluation of their home currency (CAD and AUD!)
So there is no advantage for NMI here"
The BIG advantage is that the market cap of NMI is 3.5x lower than LSG, giving NMI much better value as indicated by the crazy low P/E. NMI added 11m cash last quarter. Adding 40m cash a year to a
139m market cap is much more significant than adding 40m to a 480m market cap of LSG.
"One last observation, NMI seems to be quiet illiquid, trading volume below 100,000 shares on some days."
Current average volume is 289m. Sure there can be big swings, but i don't care as long as the share price goes up. In my opinion, you look too much at past history instead of looking at what will happen in the future. Volume is low because they don't have an analyst following them yet. That is expected to change with the new management. Raymond James was at the last conference call.
Show me LSG drill results that are better than NMI's recent crazy high grade results 386 g/t Au, 5,283 g/t Au and at thick widths for many of them.
https://finance.yahoo.com/news/newmarket-gold-identifies-high-grade-104500798.html
Or drill results of any other miner that are better for that matter.
Those drill results are close to where they are currently mining. I can assure you that you will not need to worry about AISC when they start mining those high grades. AISC will drop, production will increase, and earnings will be even better than what they already have, making the P/E even crazier if the share price doesn't move up.