LAKE SHORE GOLD CORP 6.25 PCT DEBS T.LSG.DB

LSG Outlook

[MestQalander]

 

LAKE SHORE GOLD CORP. (LSG)
Lake Shore Gold is a gold mining company.

52-Week Range: $0.60-$1.28

Let’s get the bad news out of the way first. Over the past trailing twelve months, Lake Shore Gold has a profit margin of negative 75% and a return-on-equity of negative 35%. This isn’t going to excite many investors. On the other hand, fixable situations (that are actually fixable) present the biggest opportunities — if that company does manage turn it around, the stock price appreciation will be substantial.

The good news is that preliminary cash operating cost per ounce came in at $595 for 2014, versus a previous expectation of $675-$755 per ounce. These lower costs have helped drive free cash flow, which can be put to use advancing new discoveries. (For related reading, see: Does Warren Buffett Invest in Gold? Why or Why Not?)

Lake Shore Gold is very focused on costs. In 2014, it strengthened its balance sheet, which included $26 million in cash and bullion, while repaying $45 million in debt. It currently has $60 million in cash and billion with its senior secured debt only $7 million.

This is a good speculative play, but you still need to be careful with any company that’s trading below $5, let alone below $1. Remember, the company is not profitable.

[PatriarchJI]

You're completely incompetent... you understand that much, don't you?

[Shlinker_]

While any company has debt to pay, they are not technically profitable. LSG would be debt free by the end of this year - but they won't be because they either won't exist as a company, or they'll have expanded CAPEX and OPEX building to produce 250K ounces of bullion. Is Suncor Energy profitable? The debt there is now at 1.4 Billion

[PatriarchJI]

Actually, "technically" they are profitable because they're showing positive net and comprehensive income (as of Sept. 30, 2014).  The fact they have debt is reflected via interest and other fee servicing that is included in the aforementioned two items - we're talking about profit (i.e: income statement).