Symbol Lookup »
($$) Newsletters »
Self Directed Investor Inc
Newsletters ($$) »  Email alerts (free) »  RSS »
SDI: "Empowering investors with ideas and education"
$$  Newsletters  |  FREE   ♦ Articles · Videos · Calls  |  TOPICS  ETFs · Earnings · Economy · Energy ·  ♦ Gold · Income · Personal Finance · Trading

WELCOME!

The Gold Stock Strategist analyzes leading junior gold producers and major gold mining companies.

Comments are welcomed!

Monday, March 31, 2008

Jaguar Update

I read Jaguar Mining's 3/24/08 release with Q407 production costs ($405 per oz.)--up considerably from what I used in my model for 2008 and 2009 ($306 per oz. for 2009 as indicated in JAG's February 2008 presentation). Here is a link to the press release.

March 24 Jaguar Mining Press Release

I have updated my short-run cash flow model tonight and have new price targets for JAG.

Here is what I get out of my model after reading the press release more carefully. Refinements and constructive critiques are welcome.

I get $0.95 cash flow per share in 2008; $1.96 per share in 2009. At 10x-13x cash flow, that translates into a range of $9.55 to $12.42 per share valuation in 2008; and $19.60 to $25.53 per share in 2009.

I use 10x to 13x cash flow metric to value junior gold miners. These are appropriately conservative valuation multiples in my opinion. Blackmont uses 15x in their March 13 analysis of Jaguar Mining and have a $18.25 per share 12 month price target.

My G&A projections are $14 million in 2008 and $16 million in 2009. 4Q07 G&A was $3.5 million. $3.5m x 4 equals $14m.

Jaguar did have some so called "one time" G&A having to do with listing on the NYSE and other. My sense is that they will continue to have G&A equal to 4Q07 in 2008.

Price of gold assumptions are $925 in 2008 and $1000 in 2009.

Production costs per ounce are assumed to be $410 in 2008 and $420 in 2009.

I remember Jaguar management mentioning that production costs are in US$, so it didn't surprise me that a falling dollar in Q4 was partially responsible for increasing cash costs per ounce. A declining value of the US$ would increase production costs in 2008 as well though I haven't accounted for that.

Total cash cost used to estimate production costs per ounce is equal to cash operating costs plus royalties (if any) and production taxes.

Total cash cost does not include capital expenditures for exploration (projected to be $90 million in 2008 and $98 million in 2009 by Jaguar management).

Good luck to us all!

No comments:

Gold Price Chart--Interactive

HUI "Gold Bugs" Index--Interactive

Breaking News!

    follow me on Twitter

    Gold & Mining News

    Seeking Alpha on Gold and Miners

    Lijit Search

    Disclaimer and Copyright

    Gold Stock Strategist receives no payments from companies in exchange for coverage. The Editor does own and authors may own and trade stocks they mention.

    Nothing in goldstockstrategist.com is intended to be investment advice, nor does it represent the recommendations by goldstockstrategist.com or other authors.

    The reader accepts information on the Gold Stock Strategist with the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action.


    The information on the Gold Stock Strategist is solely for the entertainment of the reader and authors.

    The Editor reserves the right to delete material deemed inappropriate for goldstockstrategist.com.

    ©2008-2009, Nystrom & Associates LLC, All rights reserved and protected under US copyright law.

    FEEDJIT Live Traffic Feed

    ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »
    SDI Featured Articles | Self Directed Investor | Copyright © 2008 - 2009, All Rights Reserved

    Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of Self Directed Investor, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will Self Directed Investor, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

    SDI is associated with: ValueForum.com -- participation in SDI's conference calls is available exclusively to ValueForum members. | MarketNewsVideo.com -- weekly SDI videos are produced by Market News Video. | TickerTech.com -- stock quote content is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.