You have to look at the earnings relative to other juniors/mid tiers. It was better than some q1 reports which caused the stock of those companies to go up 10%. Anyone who sold iag and put all the proceeds into another miner; good luck. If you sold and stayed out of the sector (as I believe BHF did) I totally understand. For me, I still want to be in a gold miner and I think this one goes to 4 in the next 3 weeks.
I agree with what you state, although I think they could make money on Cote with gold a lot lower than 2500. But yes, I agree with everything else you state. However, if you do want a leveraged play on POG, there's nothing much better than IAG at the moment. All the juniors have problems. IAG has been terribly managed over the past few years but right now, it's as good as any others in the GDXJ. Get out when you think gold has made a short term top and perhaps don't even bother getting back in. If IAG makes it past 4, perhaps it's time to buy some physical and/or randgold. I do agree with the "strategic hesitation" comment but there's nothing to buy for a fair price. SSRI paid way too much for their recent purchase and IAG could't even buy the other 45% or whatever at Sadiola (I think).
I think gold has further to run. I don't see the correction happening for several more weeks. I do think the service sector will pull the economy along as we get into the summer months, so by the time the June 14th Fed meeting rolls around, I expect the dollar to strengthen. No one knows if the fed will tighten or not, but assuming I am right and gold continues higher into the meeting, I suspect it will be a sell the news response even if they do not tighten. Mid 1300's by then, perhaps? 5 weeks. I don't see why not. If so, IAG will pass 4 bucks.
Yep, that's one reason why folks who look at the IAG chart and overlay the pog, thinking "when pog was X in YYYY, IAG was at X, so if pog gets back to X, IAG will be X". Not gonna work quite like that. Lot's of damage done during Letwin's tenure, but that's why it was trading at 1.15. At some point, the miner voting machine will become a weighing machine and 10% daily moves will be no more. I don't think we're near there yet though. There's still enormous under investment in gold. Although I expect a correction as we approach summer, this bull market will be epic. I read a report from someone the other day that said after a healthy correction within the next couple of months, the reversal from that correction will be the most bankable trade seen in years..... Make of that what you will but I, for one, agree. So many investors are desperate to get in at lower prices and the cure for lower prices, when we get the correction, will be lower prices!
Totally agree. There are a few unknown variables, as there always are with these miners but I expect some upgrades soon (because you know they already bought in the past couple of months). My guess is that you will see expectations of a 0.02 profit in 2nd Q with a buy rating and target price in the high 3's.
Good observation, but I think they warned about lower grade at Essakane in the last report..... Still, you're right, $1,116 in the most productive mine is a disappointment. All in all though, it's an improvement on previous disastrous reports.... The concern of course, is just how high will gold need to go in order for IAG to actually make a profit..... I suspect next Q will be profitable with current gold prices and some improvements at Essakane (I'll look forward to hearing about that from Letwin).
I was just having a bit of a laugh with you BHF. I share the same mentality and don't usually look back with much regret (sometimes try to learn from it if there is a lesson to be learned but I agree, taking profits is always nice). I actually share your opinion on IAG for the most part and I see MDR is working out nicely for you today. I myself would like to start trading another sector because I do expect the dollar to bounce hard as we get into summer and to gold mining sector to experience a fairly big correction. I mean, lets face it, with gold flirting with 1300, my guess is that IAG will report 0.02/s for the 2nd Q. It's keeping them healthy, but it's still kind of precarious..... I am expecting oil to test around 38, maybe lower, before the helicopter money is mentioned on a very serious level. I will then start buying the energy sector again.
Exactly. You have to take that into account. Also, most on this board lower price targets when they make an unadjusted loss. They made an unadjusted profit of..... I think it was 0.13/S. My valuation goes up a little based on that, just like it went down after the hedging losses. At the end of the day it's loss/profit.
You're absolutely correct, investors wrote it off a long time ago. But, you never know, if gold makes a new all time high in a couple of years time, it's a lottery ticket that pays something out.
Thanks for posting. I couldn't listen. Did they mention anything about the lower grade/higher costs at Essekane? I think they mentioned in the 4Q earnings that they were going to experience lower grades in Q1, so I don't think it was the biggest surprise to the Street. However, as Maven eluded, the AISC were quite a bit higher. Higher than what I expected, but again, I'm pretty certain they warned about that....
I think that might be a bit of confirmation bias, bhawksfan..... I do it all the time. Maybe you're right and this will no be considered good enough. It's certainly not great. I wanted to see AISC lower. $50 lower than what they reported would have gotten them to break even for the Q. If I thought a better miner was out there and undervalued, I'd switch but I really think if you compare these numbers with those from other miners that were crushed in the sector, there's still plenty of room for this one to run IMO.
Average realized gold price 1188. Maven can tell us what it's running at so far this Q. I think the street will be ok with this report. They have maintained their guidance for 800 oz and AISC between 1000-1100. I have seen smaller beats than this in the sector met with jubilation over the past few weeks. I am still not overjoyed but with gold near 1300, an extra $112/oz over a year would be an extra $90M. That's an extra 0.22/share. This is what investors who are late to the party are looking for right now IMO. Some other stocks have run up 400%. IAG couldn't hold on to a 300% gain. I think it will be considered cheap based on current pog and the maintained guidance for the year. Another 30 bucks reduction in AISC and there's another $24M in cash (0.06). You would have 0.26/share forward eps. In a bull market, the stock would be worth a 22 multiple ($5.72). Even with a more conservative 18 multiple, it would be $4.68. I don't see this stock going below $3 unless gold falls fast and hard.
That's what I have been saying for several weeks..... No one who has been following this company for a while will accept another loss after this Q. If they don't beat Q1 expectations, I am out of it. Maybe I'd buy back in somewhere in the mid 2's assuming pog didn't collapse but I agree, investors will not accept this company continuing to lose $ much longer.
That IAG underperforms relatively for the first time in about a month on the day they are due to report..... I bought a lot of shares anyway. I think the analyst estimate will be beaten on this occasion. I think this may be the nut that the blind squirrel finally finds..... Barely more than $3 for 800 oz/year with pog flirting with $1300. Either we were all wrong when someone on this board asked a few weeks ago "How much is IAG worth with gold at $1300" or Mr. Market has it wrong. We'll see this evening.
They don't have IAG making a profit in any Q this year. 0.23 loss for 2016. They have to invest in Westwood and other projects for the future and the CAPEX has been outlined already but I sure do hope Letwin has held back on spending during the first Q. They need to show that they can make money with gold in the mid 1200's. If they can do that, the street will not care about capex next Q.
Just scalped a few thousand at 3.31 for a day trade. If gold hits 1300, this stock is worth at least 3.43 today. I just don't trust Letwin to produce the necessary profit, hence my open order on the original shares!
Had a sell order (all my IAG) in at 3.43 and a measly 300 shares were bought..... Order is still open. Interesting how IAG has been up 6% on a $6 move in gold on several trading days over the past few weeks and yet gold is up $25 and we're up only 6%. I am not that surprised. If gold holds up here before market close, my 4.43 order will fill. However, my point is that the miners lead the metal and they got ahead of themselves a little.... Nice thing is that those who bid them up have been vindicated, so they will do it again on any minor pullback. Typical bull market behaviour. When the regulars on this board were watching IAG lose 10% in a day, I opined that we would see irrational exuberance to the upside when the gold market turns. I've seen a fair amount of that over the past few weeks.
The bar doesn't seem to have been set as high as I thought it would be for the juniors. I had figured IAG would have to make 0.03/share to move higher, but as long as they make a profit of at least a penny or perhaps even just break even, they should get the benefit of any doubt that the future is paved in gold. I am getting out if they make a loss the Q though.