May 27, 2009
– Comments (15) |
RELATED TICKERS: AUY
Interesting, I've never liked AUY, but I may have to reconsider. I like JAG (and your JAG spreadsheet) more though. :)
You have outdone yourself, speedy!
I urge anyone hoping to envision future cash flow for Yamana Gold as this currency crisis plays out to pay extremely close attention to speedy's valuation here. I know this company well enough to confirm the validity of the metrics used, and I fully endorse his very realistic timeline of gold prices progressing through the remainder of the precious metals bull market. It is clear from his data that speedy has studied gold very carefully and considered the input of some of the best thinkers on the subject.
I'm telling you, Fools... this is one serious look at the innards of growth-oriented intermediate gold miner hitting its stride at just the right time in the gold bull market. And this is not even including the masive copper reserves! Subscribers would pay good money for this caliber of cash-flow analysis. Hopefully shareholders will get organized and motion for a dividend when the time comes. :)
BTW, production is in thousands of ounces in case anyone's curious. I have long-held a target number for Yamana in my head, and it lies slightly above the far-right figure in your sensitivity analysis. :) Copper production could be a big part of what takes it there.
Perhaps now Fools will understand why I didn't sell a single share as AUY plummeted more that 74% from its 2008 highs before carving its partial recovery. [Unfotunately, I also lacked sidelined capital to acquire more] The long-term trajectory of this company will make that low the subject of fascination in future years.
Between my fundamental analysis and relative valuation to its peers, and speedy's awesome cash flow analysis with a (believe-it-or-not) conservative valuation analysis, I believe that a pretty rock-card longer-term case for Yamana Gold can be made. Of course, the regular caveat about anything being possible in the short-term when events of this magnitide are transpiring must always trail such projections.
Speedy, thanks again for bringing such quality research to the CAPS blogs!
TMFSinch... did you seed Speedy's analysis of Jaguar Mining? If so, are you loading up heavily?
Thank you both and appreciate your positive comments. This is the best valuation I was able to come up with due the fact the mid-tier- senior miners will start generating real free cash flow just thi year. Typically I screen stocks using 3 metrics, pre-tax return on tangible capital, earninigs yield & free cash flow yield. This industry, however, is more or less of an untapped industry on the brink of becoming free cash machines.
Actually, I missed it. I'll take a look when I get a second... looking forward to it.
TMFSinchiruna & goldminingXpert :
I was thinking about putting togherther a 12 page or so spreadsheet valueing the GDX: Gold Miners ETF for those risk averse investors that want some exposure. The only problem is that I have not recieved great output except for you two an a few others. Either they don't care for these models are havnt seen them. Any thoughts?
For the record - I"ve been checking out your valuations; but I'm more of a lurker so you won't see too many comments from me...
BTW - thanks for what you're doing!
You are very welcome, if there are any requests for a particular company I would be more than happy to do a quantative analysis for anyone. The previous models were bear bones in terms of completness but the best i can do for that industry. I usually incorporate normalized free cash flow, ratio analysis, effciency of capital couples with dcf, h-mode,e-model, ben Graham, greenblatt and my own personal model. I will try to post one I did for Potash, Im just not sure if all the pages will be linked correctly.
-Thank you for your input
If you don't have another gold name lined up, I'd love to see you run the numbers on Northgate (NXG). I firmly believe it is extremely undervalued. It's the 2nd best deal I am aware of in the precious metals space after Jaguar that trades in the US.
Speedy, I still intend to link your valuation analyses to some of my articles, which hopefully will help get the word out about the incredible informtation you're providing.
I'll be writing up SLW this week, and will link to that post.
I would love to see a work-up on RGLD, if you're feeling so inclined. :)
As a shareholder, I would also be interested in the NXG analysis.
I will gladly do both, rgld make take a while due to some of their royalties are from potash, etc. I also have done agnico eagle-mines. So I will get those up sometime today. I got a freakish valuation for jaguar, which I had liked already. The one I published caused me to up my shares by 30%.
I'm glad to see some people like this sort of thing, I am not a fan of multiples alone as many people are.
Nice work on the sheet. I may wait to pickup shares after summer - I believe that they drop after summer? I hope so :) Rec from me
TMFSinchiruna & goldminingXpert :
I posted a valuation for NXG, assuming a lt copper price of $2. I also posted one for Potash, check it out, its a very in depth valuation and lemme know your thoughts if you can.
Great blog, Speedy and fellow mining/metals afficianados. Two thumbs up. I appreciate it.