Analyst Actions: Casimir Capital on St. Andrew Goldfields - "A Strong Finish to a Record Production Year"

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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 rating reiterated."



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

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