RE:RE:RE:RE:q4 resultsHigwired7, I wasn't trying to give you a hard time. Teranga Gold actually reported results that were 1.5 cents above the estimate which I posted in my post #25771029 dated January 30.
This company uses a couple of accounting gimmicks to make their results look better than they actually are. One such gimmick is capitalized deferred stripping which counts as a credit against their current quarter mining costs. I had estimated a $3.5 million dollar credit. They took a $4.8 million dollar credit in Q4.
The other accounting gimmick is inventory movement, and they took a $5.6 million dollar credit for that instead of my estimate of $5.0 million dollars.
But aside from the accounting gimmicks, the main issue for me is the unpredictability of how much of their ore production makes it to the bottom line in the next financial report. In this last quarter 40 percent of the high grade ore that they mined went into their high grade stockpile, and that was money that didn't make it to the bottom line in this quarter.
So those are three draw backs in investing in Teranga Gold at current stock prices.
What's the outlook for the next three quarters assuming that the price of gold averages $1250 in Q1 2017, goes to $1400 USD in Q2 2017, and on up to $1750 USD in Q3?
My numbers for Q1 2017 are $3.0 million after tax profit or 0.6 cents per share, Q2 2017 after tax profit should increase to $7.8 million USD or 1.5 cents per share, and in Q3 2017 my estimate is for after tax profit of $17.7 million USD or 4.4 cents per share. Those estimates are for after tax profit attributable to Teranga Gold shareholders, and the numbers could go up or down by a penny per share depending on when management decides to feed the mill their 20,000 ounces of gold that they withheld from the market in Q4 2016.
Will the stock get to $2 USD with an increasing gold price? No doubt, but IMHO, there are better stocks to own in the current precious metals market.