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...since you are the only person still on this board...!! Are you subtly trying to suggest that this is a strong buy?? I've held this share for 4 years, and even still sitting on a tidy profit! Gotta admit though, that's some good research there, which I've checked out. Thanks! I'm wondering if a cheeky top-up is on the cards...! ;)
CONT. Valuation Our sum-of-the-parts valuation of the Net Present Value of the Simberi oxides, Gold Ridge and Simberi sulphides, plus allowing for cash and debt at the year-end, gives a total figure of $914.6 million or £564.6 million. This equates to 276p per share based on the existing shares in issue. Allied Gold is substantially undervalued not just on a Net Present Value basis but using yardsticks such as the cash flow multiple. Similar stocks would normally trade on a multiple of 5-7 times cash flow whereas Allied Gold trades at less than 3 times 2012 cash flow. We reiterate our recommendation of Strong Buy, with a target price of 276p.
CONT Gold production at Allied Gold is climbing quickly and last year rose by 55% to 108,338 ounces. This rise was mainly due to the inclusion of production from the Gold Ridge Project – acquired in March 2010 – and where production was resumed in March 2011. Of the total, Gold Ridge contributed 51,054 ounces and the Simberi Gold Project produced 57,824 ounces. Revenue increased by 81% to $146.4 million for the year on the back of higher production coupled with a 33% rise in the average realised gold price to $1,620 per ounce. This came despite the company suffering from mechanical issues and wet weather at Simberi, along with being unable to access the high grade ore at Gold Ridge. Together with rising input costs this meant that production costs stayed higher than had been hoped. The cost of sales increased by 87% to $130.1 million leaving a gross profit of $16.3 million, 43% higher than the previous comparable period. After corporate expenses, increased foreign exchange losses and reduced gains on financial transactions the company made a loss of $5.97 million in 2011 against a profit of $5.77 million in 2010. Foreign exchange movements have masked the underlying performance as in June 2011 the company had switched from reporting its results in Australian dollars to US dollars. Last year there were $4.06 million of foreign exchange losses, whereas 2010 profits were flattered to the tune of $1.69 million in currency movements, plus there was a $4.3 million gain on settling a financial liability. At Simberi production in the March quarter increased by 21.5% to 15,051 ounces and gross cash costs were reduced by 4% to US$1,067 per ounces. At Gold Ridge production in the same three month period increased by 1.4% to 19,056 ounces and cash costs reduced by 14.8% to US$1,124 per ounce. The March 2012 quarter saw the board targeting 16,000 -18,000 ounces from Simberi and 23,000 – 25,000 ounces from Gold Ridge; and even though these targets were unfulfilled the Directors have maintained their current year targets of 75,000 ounces and 105,000 ounces for Simberi and Gold Ridge respectively for 2012. The company’s US$850 per ounce cash cost target looks to be attainable as Gold Ridge is well on its way to the targeted 100,000 ounce per annum, coupled with more normal conditions at Simberi and the switch to cheaper heavy fuel oil to power that mine. Attention will now be focused on the expansion at Simberi where the plan is to prove up more sulphides to underpin the feasibility study and truly demonstrate the potential to grow to becoming a substantially larger gold producer in the medium term. Moving ahead, the 180,000 ounce target for 2012 could just be the start as the board has a well-developed strategy to boost annual production to 300,000 ounces and beyond in the coming years. Allied Gold is targeting a combined 200,000 ounces of gold per annum with a 10-15 year minimum life from its two 100%-owned gold mines.
Allied Gold, the Pacific Rim gold miner, has announced impressive quarterly results, with 34,107 ounces of gold produced in the March quarter – a 9.4% improvement on the December quarter. Gross cash costs for the three months also fell by 11% to $1,099 per ounce. The board reaffirmed not just the 2012 production target of 180,000 ounces but also the gross cash cost target of $850 per ounce by the year-end. Frank Terranova, the MD and CEO, commented that “An improvement in operational performance was achieved in the first quarter, resulting in a solid increase in production, and a healthy decline in cash costs. Production in the quarter was the second highest on record and the Company remains on track to achieve full year output of 180,000 ounces. That compares with 108,000 ounces in 2011, and confirms that Allied Gold is moving firmly in the right direction, with strong production growth leading to reducing cost profile. The remainder of 2012 will be an exciting period for Allied as we put in place the various expansion programs and cost reduction initiatives that will boost margins, and lift profitability. With over 3.0Moz in reserves and 8.0Moz of resources, Allied Gold continues to provide the market with an attractive opportunity to invest in a rapidly growing mid-tier gold producer with declining costs and expanding margins.”
A bit more on the bones of the last post.... GE&CR reiterated its "strong buy" stance on Allied Gold Mining* (ALD) with a 276p price target, noting the miner is substantially undervalued against its net present value of 282p. In addition, the research house pointed out that similar stocks are trading on cash flow multiples of 5-7 times whereas Allied trades at less than 3 times 2012 cash flow. GE&CR also believes that the 180,000 ounce gold production target for 2012 could just be the start of hefty output growth as the board has a well-developed strategy to boost annual production to 300,000 ounces and beyond in the coming years
16th May 2012 Analyst: Dr Michael Green Email:michael.green@gecr.co.uk Tel: 0207 562 3370 Allied Gold Mining - Reaffirms 180,000 ounce gold target for 2012. Strong Buy at 102.5p with a 276p target price
The Corporate Governance Statement contained within the Company's annual report for the period ended 31 December 2011 reported that the Company did not presently have a diversity policy. The Company did however state in the Corporate Governance Statement as follows: "The Group employs a broad mix of individuals reflecting its philosophy of hiring the best candidate for all positions at all levels irrespective of race, religion or gender. In terms of the composition of the Board and Board nominations, the Remuneration and Nomination Committee regularly reviews the composition of the Board and will consider the requirements of the Davies Report and the Australian Stock Exchange Principles as part of the process of determining the composition of the Board that is the most appropriate for the group" A Diversity Policy had not been formalized during the year as the Company was still in the process of reviewing and ensuring that various stakeholder groups across all jurisdictions, namely Papua New Guinea, the Solomon Islands, Australia, The United Kingdom and Canada are considered in preparing such a policy. Whilst a formal policy was not in place, the Company operated in accordance with the philosophy stated above and in the Corporate Governance Statement.
Quarterly Report for the March Quarter 2012 The Quarterly Report contained a quote from Mr Frank Terranova the Managing Director and Chief Executive Officer of Allied, which advised that the Company has over 3.0Moz reserves and 8.0moz resources. This statement should be read with reference to the following Reserves and Resource Table:
http://www.investegate.co.uk/Article.aspx?id=201205100700120062D
A while back ALD was trading at 15p a share. I invested when it was in the low 20's. Then it became the target of the get rich quick bloggers and became a vehicle for mega hype pursuing the rush for gold shares in one form or another. This hype spread to any company that was connected to precious metals mining and valued in pennies. This was perpetuated my certain newspaper tipsters selecting various miners and the mindless herd following their lead regardless . This obviously, caused the share price to increase, in some cases double! This share price reflected demand, but in a lot of cases not the companies intrinsic value and growth. People say why does gold mining companies share price not follow the price of gold ? Well the reason is they have become the victim of hype and are already over inflated. Returning to ALD, I bought it because it has sound basics and potential growth.True,this has had any companies basic teething problems, but as i have always said i am in for the long term and it is in all my ISA,s and my SIPP. It did double and halve ,but thank heaven ,the hypers and neurotics have jumped ship and ALD will steadily move forwards and slowly upwards. ,
Two page artice in this week's Shares Magazine
I agree this is a really frustrating stock to hold. I was in around the 40p mark back in the AIM days hoping increased exposure on the main market would boost interest with the big investors. My inexperience not to spot the 2 get out points, one at 220 and later at about 190. In fact even with the benefit of hindsight I should have cut my losses at 160. Instead I decided enough was enough at 122 and glad I did as it looks like the price has dropped even further. I lost around 50% of my original holding on this one. Anyways, good luck to those still in. I was getting bored of the low volumes and the constant trend down. Interestingly, when I bought, it was constantly trending up with gold price seemingly unstoppable in its rise. Jim
Has collapsed 5% today so not looking like this is the bottom for the sp by any means
Tom78 is right and more to the point it is in my view unprecidented for a gold mine to tank, for no apparent reason, just when it manages to achieve its long sought goal ie. significant production. If management is right that there is no apparent reason other than small scale irrational selling by impatient individuals we can logically look forward to an upward shutter when the percieved value we see becomes apperent to all. The only other senario is an elephant in the room that we're all unaware of-hopefully Management will allay this fear on forthcoming round of presentations.
I remember when we were on AIM peiple were talking about this being £1 per share, well were nearly there but unfortunately there has been a 6:1 consolidation since joining the FTSE 350...
I have e-mailed the management, asking if there is a particular forced seller etc and they have been good enough to come back to me saying they are aware of no reason for abject share performance, but are shortly to have a Roadshow to promote the Company. Considering the company is ramping up to a projected 200,000 ounces production of gold this year, with so much development work behind them, this is the time when shares should normally be booming, not tanking. Either this is a Bargain of the century , or there is something we're all missing.
...shed some light on why this has performed so badly over the past three months? Is anything likely to stop the decline?
Have traded those before and they are another load of rubbish but it does bounce back, this just kills you slowly.
look at ABG - got nailed today
Keeps dropping like a stone. At least its below the directors exercise of option price so up yours Frank!
dogs are nice, THIS is a ****ed up chit>>>
Well having said that it probably is a dead duck, what a total dog this is!!
RNS today detailing production figures for last 3 months and full 2011. Have a read. Ambitious targets for 2012 but if they do deliver on targets and reduce costs this should fly.
so what do we think still some value in ALD, or is it just dead in the water?