The Gold Report
Notable Quotes
"ICG has closed a CA$2.5M flow-through placement." (12/24/15) Integra Gold Corp. - Thibaut Lepouttre, Caesars Report More >
"The exploration upside at MAG's Juanicipio project is substantial." (12/23/15) MAG Silver Corp. - Gwen Preston, Resource Maven More >
"AKG's management continues to deliver on its development milestones." (12/22/15) Asanko Gold Inc. - Nana Sangmuah, Clarus Securities More >
"We are initiating coverage on KDX with a Buy rating." (12/21/15) Klondex Mines Ltd. - Don Blyth, Paradigm Capital More >
"VIT's Eagle is a shovel-ready, fully permitted, prefinanced gold project." (12/17/15) Victoria Gold Corp. - Tom Hayes, Edison Investment Research More >
CGC: Significant Reserve Increase, Mine Life Extended
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ADAM GRAF, Dahlman Rose & Co.
(10/13/2009)
"Capital Gold Updated Reserve & Resource Numbers. This morning, Capital Gold announced a new and larger mine reserve and resource estimate for its El Chanate Gold mine in Sonora, Mexico. New reserves and resources include several rounds of exploration drilling, including deep core drilling within the current reserve pit. The new estimate was conducted by SRK consulting of Lakewood, Colorado. New reserves numbers yield 1,504,000 ounces of contained gold, more than replacing gold ounces mined to date. Gross resources exclusive of reserves were estimated at 226,000 ounces of gold. These new numbers are based on an updated block model, mine plan and production schedule (not yet released) at $800/oz gold. Modest Extension to Our Mine Life Assumption. The new numbers modestly increase our modeled mine life out to 2022, as we had already assumed full conversion of resources into reserves at the current forward curve, and assume capacity ramp-up to 18,000 tpd by 2012. We continue to view El Chanate as a long-lived and low-cost gold asset providing strong leverage to gold price, and yielding strong free cash flows on the order of $20 million to $30 million per year (post-tax). NAV Inches up with Mine Life. Using the current forward curves for gold, silver, and the Mexican Peso, we value CGC at US$1.80/share NAV. This is a modest increase from our previous NAV of $1.67/share before the new reserve estimate. At C$0.70/sh, shares continue to trade at a steep discount to our calculated NAV. We maintain our Buy rating on shares of Capital Gold on both a value basis and due to its strong leverage to gold price. Year-End Conference Call. Capital Gold will have its fiscal year end (7/31) conference call this Thursday, October 15, 2009, at 11am ET." |
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