Why OGC is a LaggardTrust in Management
This company has never come close to what average analysts think it should be because it always has a ready excuse for never meeting expectations over 4 quarters. ( Also Analysts are always way too optimistic for most stocks) IMO
It is always something.
Lately it is cost control. ( along with the Haile 3rd Q concern)
Let me give you some numbers about what this company should be based on current commodity pricing and what expenses should be based on around 500,000 ounce production and paying the extortion fee to Philippines.
Lets use the 1st half of 2023 figures as a base case and then add in what best guess is for extortion payment. ( 10 million extra per quarter).
The 1st half of 2023 gold price was just a bit lower than now and copper price a bit higher so lets say it is a wash ( should be bit better overall)
Production was 248.2 Gold and Copper 6.9 which is consistent with what Management says should happen. ( Should be bit more next year)
AISC was 1429 so why should costs be much different with normal production in 4th quarter and onward?
Now EPS for 1st half was .15 and CF was .36 and FCF was .08 all US$ ( US OGC share price $1.71)
So double that for a full year and subtract 20% for extortion fee ( my best estimate based on ambiguous 13.9 million for first 3 quarters - I am erring that it is much more per quarter)
So .24 EPS or 7.1 P/E; .58 CF or 2.95 P/CF and .13 FCF or 13.2 P/FCF.
These are faboulous numbers, especially for a predominatly gold miner operating in 3 jurisdictions with proven 10 years+ life and permiting essentially done and operating mines completed.
Only 1 reason for pathetic price - see beginning.
So, if you have faith in Management it is a great buy, if you do not, expect more of the same. IMO