Casimir Capital analyst Eric Winmill has released a report on
St. Andrew Goldfields, maintaining a "Strong Buy" rating and target
price of $1.15. He said:
Q4/12 financial results just ahead of expectations: "Q4/12 EPS
was 0.03, ahead of our $0.02 estimate as results were boosted by
better than expected cash costs and a non-cash tax recovery that
more than offset slightly higher expenses. Q4/12 CFPS of $0.046
(pre W/C changes) was mostly in-line with our estimate of $0.044.
For the full year, SAS recorded EPS of $0.07 ($0.05 adj.) and CFPS
of $0.15, vs. our $0.06 and $0.13 estimates."
Cash costs better than expected: "Q4/12 cash costs were
US$884/oz (US$745/oz excluding royalty), better than our forecast
of US$952/oz (US$809/oz excluding royalty) and better than $895/oz
q/q. The outperformance can be explained in part by reduced
operating and contracted development at the Holt Mine that more
than offset some minor cost creep at Holloway and Hislop resulting
from lower mine production. For the full year 2012, cash costs were
US$919/oz ($US788 excl. royalty), better than our estimate of
US$934/oz (US$804/oz excluding royalty)."
2013 production guidance: 95-105k oz Au: "St. Andrew reiterated
2013 production forecast of 95-105k oz Au (we model 102.4k oz). SAS
also provided cash cost guidance of US$800-$850/oz Au excluding
royalty (we currently forecast $801/oz)."
A strong finish to a record production year: "SAS ended the year
with $30.7mm in cash, in addition to $10mm in undrawn credit. We
estimate resources on hand should be sufficient to fund development
projects underway in 2013."
Maintaining price target and rating: "Following the Q4/12
financial results, we have made only minor revisions to our model,
prompting a minor decrease in our NAV estimate and increases in our
2013 EPS and CFPS. Our target of $1.15/sh (unchanged) is based on a
1.2x multiple to our DCF5% of Holt, Holloway and Taylor, 1.0x
multiple for Hislop and $25/oz value for Aquarius. As SAS continues
to deliver predictable operating results with stable cash costs, we
believe the shares are apt to re-rate higher. SAS shares are
trading at ~2.5x our 2013E CFPS (vs. peers at >6x). Strong Buy
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