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Kinross Gold Corporation Message Board

  • investora2z investora2z Apr 24, 2013 1:18 PM Flag

    Hope the bounce lasts..

    The decline in the stock has been due to a combination of two factors. Firstly, the uncertainty over the lawsuit and impairment charge of $3.2 billion on account of goodwill and property, plant & equipment related to two projects in Mauritania and Ghana. Secondly, like all gold companies, the decline in prices of the precious metals. These two factors have led to several downgrades for KGC with the average target price being reduced to as low as $7. The last leg of the decline has been particularly forceful with the volumes topping 20 million shares on several days. The mild recovery recently may be similar to the dead cat bounce being shown by many other gold companies. The stock is available at a significant discount to book value (P/B 0.64) and the price to sales is also 1.45. Importantly, it is available below the levels it was trading during the financial crisis in 2008, and has gone back in time to 2002 levels. Despite all the negative sentiment, KGC is open to increasing its strategic presence in the gold business through purchase of stake in development stage companies. It increased stake in Revolution Resources at 7 cents per share. This company has gold and silver exploration interests in Mexico and the United States. This is a good strategy as deals done at these times lead to good rewards in better times. Development stage companies are always on the lookout for investors to fund their exploration projects. Several of them have valuable assets with very low cost of production. Bullfrog Gold (BFGC) is one such company which reported excellent results from its recently concluded drilling program. BFGC is into development of gold and silver assets, most of which are extremely shallow and the mines were actively producing gold in the 90's. BFGC is looking for strategic partners and KGC can look at similar companies which suit its interests.

3.740.00(0.00%)Oct 28 4:00 PMEDT