Great Bear Resources Ltd. GTBAF

Lazy ANALyst at RBC Capital Mkts misses on KGC Dixie purchas

[Goodtoreadthis1]

As a GBR stockholder I relished Chris Taylor's periodic valuations of Dixie which were ALWAYS highly detailed and packaged with incredible numbers of FACTS. The RBC ANALyst covering KGC obviously was NOT paying attention to Chris Taylor's periodic reports on Dixie's value. 

Chris pummeled us with the fact that Dixie was showing itself -by drill results -to be TWICE as big as HEMLO which to date has produced 21 million OZ of gold.  CT told us that gold STARTED at the edge of the 8 foot deep gravel pit, while Hemlo gold started 100s of meters below surface. Hemlo is STILL producing thousands of OZ many many years after going into production. 

An excerpt from the highly questionable RBC report reads like this- RBC calculates that Dixie's ultimate success as a 500,000-ounce operation at all-in sustaining costs of $700/oz over either a 15- or 25-year timeframe, with capital and timelines consistent with management guidance yielding a 6-8% IRR to Kinross at $1,500/oz. Dixie's net present value, discounted at 10%, was estimated at $700 million. 

Chris T has already told us that HEMLO is likely to have 42 mil oz of gold over system life. Does anyone know or expect to know anyone who will sell them an OZ of gold today or in 2029 when Dixie starts producing -- for $1500 an OZ ?  Using that number makes RBC's report pure nonsense. If annual Dixie production is 500,000 OZ and AISC is $700 an OZ  with today's gold at $1780, we have an annual Dixie profit of  $525 mil  for 15 or 25 years which comes to  7.8 Bil or  $13 .1 Billion. 

Credit Suisse pointed out that only 10% of the Dixie property has been drilled to date. 

So KGC is swapping $1.4 Bill of todays dollars for either $7.8 Bill or $13.1 Bill NET PROFIT DOLLARS in the future and RBC values that as a negative for KGC .   It's seems the RBC guy just did not want to do a through job on this valuation which Chris Taylor had already done for him.  

[byloselhir]

price target cut to $6.50 but he gives it an "outperform" rating, how can you say your price target is cut but it will outperform, surely that means all the other gold stocks you rate are going to go down more?

[Dixieland]

Target is US 6.50 which is Cdn 9 plus. So not a downgrade from where it trades at 7 Cdn.   

[Bangor]

Kinross stole gbr steal of the century CT compares it to hemlo 30 mil ozs plus go figure. 

[turugby]

maybe we have a case for treason- we are being sold out - or maybe CTis and has been full of it - be interesting where he shows up next - we still get to vote, but I think it will be like spitting into the wind - still my vote will be NO