Analyst Actions: Credit Suisse Looks at Alamos Gold

Valuation: "We are revising our DCF to $16.31/sh (from $15.33), based on reduced costs now that the new crushing plant is working optimally. We apply a 1.1x Target multiple to our DCF adding net cash of $1.81 at par to arrive at our $20.00 TP (up from $19.00). Our Neutral rating is unchanged."

Investment Thesis: "AGI provides low cost pure leverage to gold. However, over the past year, operations at Mulatos have been inconsistent. Additionally, the startup of the Escondida mill approaches in early 2012 and with that comes timeline slippage risk. With the recent share price performance we believe the Turkey EIA approval is largely priced in and could experience a pull back if delays or revisions are required."

Cyanide issues linger, guiding for weak Q3 delaying production into Q4/11: "AGI recently indicated that the cyanide supply disruptions affecting Q2/11 production would be resolved by August and thus would have minimal impact to Q3/11 production. We considered this timeline optimistic and subsequently reduced our Q3/11 gold production to 34kozs (from 41kozs). As expected, AGI is now guiding for cyanide impacts to continue into September with Q3/11 production to remain light deferring production into Q4/11. We forecast 2011FY gold production of 148kozs at the low end of guidance of 145-160kozs, having trimmed production earlier in the quarter."

Agi Dagi and Kirazli progressing well, potential upside at Camyurt: "Barring any unforeseen delays, and assuming approvals of the environmental impact assessment applications and receipt of all required mining permits by Turkish authorities, AGI is on track for first gold production out of Agi Dagi and Kirazli by 2013. The company is expected to release an updated resource estimate at Agi Dagi and Kiralzi in Q3/11, followed by the expected receipt of the EIA approval of both projects and a pre-feasibility study by Q4/11. AGI has made early indications of fast tracking Camyurt into a standalone project with an initial resource expected in Q4/11. No timelines on development have been provided."

EPS Revisions: "We have revised our 2011/2012/2013 EPS downward to $0.55/1.12/1.47 (from $0.58/1.22/1.63) due to upward revisions to our long-term tax rate assumptions."

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

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

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