Post by
wontee on Nov 01, 2013 6:09pm
The impact of Mexican Tax on Timmins is overblown
The 7.5% on the EBITDA, and .5% on gross revenue Mexican mining royalty tax is a $40 an ounce cost impact to Timmins as per their conf. call. I confirmed it myself based on POG of $1,350. Or it is $5.2 million before tax. Of course, it all depends on the POG. Timmins would still make $35.4 million a year before income tax at POG of 1350 with the impact of Mexican tax and the current mine plan. The new mine plan should help lower the cash cost and thus higher revenue and profit as it would be mining at a higher grade mineral.
The 3rd quarter result was very impressive given the depressed POG and lower grade thus higher cash cost mined. Timmins still made a very good profit. it is making the same net profit as Gold corp. this quarter at $5 million each. Or Timmins is 3 times more profitable than Gold Corp on the per share basis. ( So, given this detail should Timmins be trading in the $20’s? Just kidding :) )
The Feb. is able to hawkish talk its way out of the impact of the non-tapering call and kept the POG at check. It is amazing why people still believe that they could taper at all in the near term.
Comment by
pdcon1 on Nov 03, 2013 7:15am
the dollar went over .80 in short order as there is a demand for petro dollars for oil , time for gold to de couple from dollar again and go its own way , once the singapore gold exchange opens there will be trading for physical gold not the paper gold , that is supressing the gold price .