But before I briefly get to that, the short term picture indicates that the current PPS price of $2.01 - $2.03 per share is a fairly historic bargain when looking at recent prices. Most of the time, this is in the $2.15 - $2.25 range, if not higher. Very rarely in recent months has it gotten much lower...and if so, only a few cents. So for you short-term traders...and I just became one of them...today's pricing is extremely reasonable with a very strong upside.
That all said, this is an even better stock for the longer term hold. 2012 saw a lot of expenditures to put things in place for increased productivity at Gibralter. That expense capitalization is mostly done now, so going forward, you're going to see increased cash flow due to increased production. You must also couple this with a optimistic forecast of decreased cost of production...down to about $2.00 per oz. I believe, vs. last year at around $2.37. That's a significant decline in operating costs...and it's going to add considerably to their bottom line. This means that even with the hedges in place, they've been making moves to increase overall profitability. You need to look past the hedges and realize that there were always ways of increasing their profits...and indeed that's now going to start happening, especially starting in Q3.
Of course, there's also the Prosperity factor. And they remain cautiously optimistic. But the fact of the matter is that is icing on the cake. Prosperity aside, Taseko is profitable and will be even more so in the near future. Even if Prosperity got shot down, I wouldn't matter...the company is worth more than current pricing just on its own current operations, assets, etc.
Some of you have been shooting darts at Russ. Intersestingly enough, when copper was considerably lower a year or so ago, many of you thought the hedges were a good move to protect pricing. To me, Russ has done just fine. And the forward profits will reflect the solid management shown.
I won't dispute that...tho in last quarter, they did have a $13 million gross profit. But of course after capitalization expenses, they showed a small loss of a penny a share. That doesn't bother me...if a company is investing to ultimately raise those profits thru increased productivity while also lowering their operational costs, I'm all for that. That's what they've been doing for quite a while now...and going forward, they're going to reap the benefits of all that expensing.