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AuRico Gold Inc. Message Board

  • fiftyfivemph fiftyfivemph Feb 1, 2013 2:31 PM Flag

    fundamentals

    hi everyone. I own a few shares of this one and i'm not sure why anymore, considering AUQ is carrying a hefty market cap for a 200 mil ounce high cost producer. 200 mil ounces if AUQ's expectations are realized. We know how predictions go in the mining business.

    I'm not being cynical but this sector gives investors a lot of aggravation.

    i would love to hear from someone who knows the story and has a studied opinion. thanks..

    .

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    • I wish there were a real fundamentals case ... then we would have an interesting discussion

    • Funny how more fundamental arguments point to AUQ being a massive short ...

      • 1 Reply to letthemeatipads
      • Fundamentals or facts? 1. Company has no debt with sufficient cash to complete capital projects. 2. New accounting system suggests that they will have at worse 2 to 5 hundred dollars of free cash flow from every ounce of gold mined. This is free cash flow after reserves, depreciation, retirements, explorations, replacements mines, basically every accounting cost a corporation uses. Now let’s add worse case $200/oz free cash flow after using the new accounting system coupled with the idea that we produce no more gold than we are producing now, 127,000oz. That gives us $25,400,000 or about $.10 a share for dividends. The best scenario based on the company’s projections is about $.60 a share of free cash flow. The conclusion is we will have a self supporting company that will pay a dividend each quarter for the foreseeable future between $.10 and $.60 a share with the distinct possibility of a share price increase based on increasing gold prices, increasing production or reduced production cost.

    • No one can give a positive fundamentals argument. That makes for a pretty obvious short ...

    • I've been asking for fundamentals for months with not so much as an incoherent rambling mixed with arguments that support owning gold directly.

    • The problem is that while most of the other gold miners drifted lower over the past few months in concert with the price of gold, the buyback propped AUQ's price. That's why it appears overvalued and why it finally started to fall after the buyback was finished. Even though they gave a less-than-stellar update a few weeks ago, it was sort of snuck-in during the buyback.

      As I've said many times, I thought the right thing for them to do was to pay a dividend, in which case the share price would have fallen like the other miners but shareholders would have cash to reinvest at lower prices. It would have been a win, as opposed to the loss incurred in the buyback (currently around 50M, if you kept score).

 
AUQ
4.07-0.08(-1.93%)Apr 17 4:01 PMEDT

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