3/28/23 youtube video: Albert S. stock screener Partial transcript
Today we’re going to talk about a new gem that i found. And its a gold mine. Gold is going up and it looks like its breaking out so we need to be buying more gold miners. ($1955 today) and oil has been weak so costs for gold mines going down. Margins improving.
Soma just found out about it. Done nothing price wise for 2 years. .40 break out .47 new hi
Time to buy. Good news as well. Talk valuations.
Colombian hi political risk. ESG award
Permitted for growth too. Could be hurt by higher taxes in future. Valuation $24M market cap. Small cap. Quite lot of debt, $20m, but debt can b paid off, by middle of next year could be paid off. Cuz plenty of net income. This is my estimate, $15m so PE of 2, equity of $13M if count all eps they’ll get up till now, april. price/book of 3.
Resources of 250K oz, gonna expand more cuz they always expand more.
Produx of 35K now, 6 years of mine life, but gonna expand that at least above 10 years
LOM over 20 years. Hi grade 8.4 g/t from 4 to 7. 50% increase in produx
25k last year, now 35k this year. But unnoticed as yet, so this #, these earnings still to come out, and then people will understand how cheap this is.
So 35K at 60% capacity, 100% in 2024? Another 30-40% capacity not counted in yet, higher produx, lower cost cuz same mill. They just fill mill up to capacity.
So even with 35k AISC is $890, which very cheap costs. Double margin $2000 gold vs $890 AISC. N they’re gonna lower costs even more, here is my estimate, (24 $800, 25 $750) n they forecast 75K by 2025 but need to find resource. Only have 300K oz resource. If they can expand resource they can double mill capacity with very low capex.
500 tpd 60%
650 tpd 2024
Then double it in 25 1,400 tpd, max, permitted. Only $5M to double mill.
Valuations.
This year, 2023, ebitda multiple of 4, low # due to low resource n colombia location, with current gold price, $150M value. But only current value of $34M, so already at least a triple from here on current produx
2024 we increase produx n decrease costs, $200M usd valuation vs current $35M, so 6x stock increase by end of 2024. N if they find resources then we have blue skies n we double produx to 75K oz with lower costs, value at $360M at $1950 gold, 10x upside
As 50% growth in produx comes out later this year with eps later this year, reflect in stock price for still unaware market.
2023 FCF $20m+ CAD, fixed costs $5.2M cad/yr, finance costs $5M/year debt, gives $85.9M cad revenue, operating income 50% probably, $30+M FCF, net income at 40% taxes is $20.24 M+ cad
Trading at 2x 23 FCF, a 50% FCF yield, thats a very good co to buy. N theres upside
So its cheap, trading at 1x ebitda n 2x FCF, n upside in produx, even exponential upside possible, very hi margins with below $1000 oz/AISC
I like this company and with higher gold even more upside.
Projection of 3Q 2023 eps was flat, but my 4Q estimate should be $5M according to my projections, or $20M per year.
Only worry is debt, pretty high, but i guess they can pay it off next year. Debt doesn’t need to be paid off right now, they have at least 2 years to do that. So looking good, this is a long hold. Lets c how they do it. C if they can achieve this produx curve forecast in their multi year projection chart.