Post by
invest234 on Jul 27, 2022 5:47pm
fitch rating
fitch likes the merger, reaffirming B+ rating.
their previous reason for constraining gcm rating to B+ was
"The company's ratings are also constrained by its small scale of operations, short mine life, and the dependence on its Segovia operations for cash flows. "
the merger solves all these. once toro or marmato is in full production, that should make fitch raise their rating, which also improves their ability to get funding at lower interest rate. bigger is better.
institutional investors also like bigger production, more diversified. that is why large caps usually get a higher p/e multiple. and they like well known management teams. some institutions buy only minimum 500k oz/yr production.
they have 3 top tier long life projects which institutions would like in toro, marmato, soto.
at 1 million oz/yr production, they can get the high p/e multiple that majors get.
mcewen did not repeated his success that he had with goldcorp because he chose smaller, not so profitable deposits to invest in. looking at the list of projects in mcewing mining, it is not inspiring. no matter how good management appears to be, he needs to be able to choose profitable deposits. at least serafino is good at spotting good profitable deposits.
by the end of this year, upper marmato should be producing 40k+ oz/yr and increasing cash generation. next year combined production could grow up to 270k oz/yr which will look good as continued growth, until the big jump from completing lower marmato and toro.