As highlighted in the article linked below, Luca Mining Corp. (Ticker: LUCA.v or LUCMF for US investors) has shown a significant upward trajectory. LUCA's recently reported Q1 2024 earnings, discussed by analyst Bang For The Buck on "Off The Beaten Path," underscore continued improvements and strategic advancements that suggest a promising future.
Luca Mining operates two key mines in Mexico: Campo Morado and Tahuehueto. At Campo Morado, ongoing optimization work with Ausenco is beginning to show positive results. The mine's throughput capacity exceeds 2,000 tons per day (t/d), and improvements are expected to enhance margins significantly.
Tahuehueto is a higher-margin mine projected to reach a throughput of 1,000 t/d by the end of 2024. Combined, these operations could yield an annual gold equivalent (AuEq) production of around 80,000 ounces, a conservative estimate pending the success of ongoing optimization efforts.
Bang For The Buck argues that several catalysts could drive Luca Mining's performance over the next year:
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Recovery from an Oversold Level: Despite recent gains, the company’s market cap of $82 million suggests it remains undervalued, especially given its potential for healthy operational margins.
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Strong Commodity Prices: Recent increases in commodity prices relevant to Luca Mining, which rose 10-30%, are expected to bolster margins further in Q2 2024.
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Optimization and Production Increases: The ongoing optimization at Campo Morado is already yielding better recoveries. The mine's throughput has decreased temporarily due to this optimization work but is expected to ramp back up to over 2,000 t/d. Switching from two concentrates to three is anticipated by late 2024, potentially boosting recoveries and sales volumes.
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Tahuehueto Ramp-Up: The mine is on track to achieve a throughput of 1,000 t/d, contributing significantly to overall production and margin improvements.
Luca Mining's financial health shows signs of improvement. As of Q1 2024, the company held C$25 million in debt, alongside lease liabilities and a stream agreement. However, the leverage has been reduced through debt-to-equity conversions and write-offs. The company’s adjusted EBITDA of C$2.2 million and operating cash flow before working capital changes of C$4 million in Q1 2024 are promising indicators.
The article highlights that Luca Mining presents a compelling case for investment with a favorable risk-reward balance, arguing that if it builds upon its recent improvements, particularly in optimization and production capacity, it stands to benefit significantly from the current strong commodity prices.
Full article here:
https://seekingalpha.com/marketplace/1370-off-the-beaten-path/analysis/6032821-earnings-season-q1-24-luca-mining-continues-to-show-improvements
Posted on behalf of LUCA Mining Corp.