RE:Q3: All good with Positive MomentumBackens needs coaching on what he says at these public conferences for the sake of shareholders like myself and for the general good of the corporation.
Over the last few days I have taken a good hard look at this little gem. I have purchased a couple hundred thousand shares.
Ana Paula is one fantastic resource.
Management has done an excellent job securing the El Sauzal mill. The price paid was very good. This mill should speed up time taken to get into production. It is a 6,000 tonne/day mill and fits very very welll with Timmin's needs.
If I were presenting at this conference I would definitely taken 15 to 20 minutes just talking about the Ana Paula. Why he let an opportunity like that get away from him is almost criminal. I urge everyone including TD who recently wrote an updated report on Timmins to reread the updated 43-101. The report fairly screams BUY ME! What exactly is not to love about a AISC of $507 per ounce???? Do the words IRR of 48% after tax not mean anything?
If I were to write a book called Investing in Gold Properties for Dummies. I would talk about how Ana Paula will be producing an average of 116,000 ounces of gold on average over its 8.2 year life span. IF they don't find any more gold nearby , or at depth. In the earlier version of the 43-101 the entire mine would be paid back in 4 years. This payback period has dropped to 1.9 years at $1,300 per ounce gold. Net present value AFTER TAX of this asset alone is worth $232 million at a US$ 1300 gold price. That equates to $0.72 per share just for Ana Paula and remember that Timmins has already paid for the El Sauzal mill.
Gold Price US$/oz$1,000$1,100$1,200$1,300$1,400 Pre-Tax NPV
5% US$262 335 408 480 553
After-Tax NPV
5% US$154 201 248 295 342
Pre-Tax IRR 43% 51% 59% 66% 73%
After-Tax IRR 31% 37% 43% 48% 53%
Pre-Tax Payback Yrs 2.1 1.9 1.6 1.4 1.3
After-Tax Payback Yrs 2.5 2.2 2.1 1.9 1.7
There is still another 7 years production at San Francisco and it appears that we are making about 2 cents per quarter profit on that now. So, whats not to like?
All the best
B&D