St Andrew Goldfields Ltd.

St Andrew Goldfields Ltd. is a Canadian gold mining and exploration gold mining company with an extensive land package in the Timmins mining district in northeastern Ontario, Canada, which lies within the world famous Abitibi greenstone belt. The company operates the Holt, Holloway and Hislop gold mines, and produced ~100,000 oz gold for 2013. St Andrew controls 120km long package which straddles the Porcupine-Destor Fault Zone, host to numerous gold deposits and mines in the region. The company, using its extensive geological database, is targeting exploration at numerous sites and has focused the exploration program on areas that lie in close proximity to the existing mines and infrastructure. The company is also conducting advanced exploration work at its Taylor project.

Expert Comments:

"Our favorite small-cap at the moment is St Andrew Goldfields Ltd. St Andrew is the largest landholder in northern Ontario's Timmins mining camp. It's in a good jurisdiction. The company has production of just shy of 100 Koz, if you annualize its Q1/15 numbers. It has been in the penalty box for over a year because in 2013 St Andrew produced 100 Koz, but in 2014 it took its guidance down to 75–85 Koz, only to reach about 91 Koz gold for the year. The company has had something like 14 consecutive quarters of positive cash flow, but because there is little coverage on the company and only a few hundred thousand shares are traded each day, the company has been underfollowed and largely ignored. Meanwhile all-in sustaining costs should remain below $1,000/oz, and guidance for 2016, with the Taylor mine coming on, is 125-135 Koz—that's meaningful for an orphaned company.
St Andrew should do well into next year as it ramps up production at its Taylor mine, which is already delivering ounces in pre-production, but should reach commercial production later this year. At 130 Koz of production, St Andrew should generate more than CA$65M in EBITDA. St Andrew is trading at one times enterprise value/EBITDA, net of its approximately CA$25M net cash balance, based on CA$65M of EBITDA. I wanted to see how that compared to other stocks in North America, so we screened all the stocks in North America that have enterprise values over $50M. It was No. 3 on the list out of about 1,500 companies. This year St Andrew should generate CA$15M of free cash flow, as it competes its spending on Taylor, and next year in excess of CA$30M. It's trading for about 2.5x free cash flow, net of cash on hand. Trading at around CA$0.29/share, this is an extraordinarily cheap stock.
Today's gold price and a little bit of an inflationary lift to gold over the next few years give St Andrew a NAV above CA$0.60 today—potential future value is even higher as the company increases its reserves, which jumped 25% last year. Most gold companies normally trade above their NAVs. And St Andrew is the cheapest in its universe based on EV/oz, EV/EBITDA and EV/free cash flow." read more >

Randall Abramson, Trapeze Asset Management (1/28/15)
"St Andrew Goldfields Ltd., whose mines are in a low-risk mining jurisdiction, is operated by an experienced, highly regarded management team. The company owns a highly efficient, modern mill and a large land package with significant potential for organic growth. . .has $21M cash on hand, operates at below-average all-in costs, and the last 13 consecutive quarters have been cash-flow positive. Production has lifted back near record levels. . .St Andrew is likely the cheapest among its peers on an enterprise value per ounce and price per cash earnings basis."

"In Quebec I follow St Andrew Goldfields Ltd. It has properties right up to the Québec border on the Destor-Porcupine Fault line. I really like this company. . .St Andrew revised its guidance upward about six months ago. What's exciting about St Andrew is its Taylor deposit, the company's next development play. That is a high-grade system as well. St Andrew is processing a bulk sample from the Taylor deposit as we speak. Bottom line on St Andrew is that it could increase its production, not this year, but in 2016. Its balance sheet is pretty good as well. . .St Andrew's all-in sustaining costs are high, at $1,060/oz, but they're coming down. St Andrew is doing a good job of efficiently mining what it has. St Andrew has a royalty issue with Franco-Nevada, which is not going to go away any time soon, but Taylor will lessen the royalty load after it goes into production." read more >

Ben Kramer-Miller, Seeking Alpha (1/10/15)
"St. Andrew Goldfields Ltd. reported its Q4/14 and 2014 production. The former came in at 22,600 oz and the latter at 90,700 oz, at the midpoint of the company's 85,000–95,000 oz guidance. . .for a company that produces 90,000 oz gold per year, St. Andrew Goldfields is inexpensive, with a valuation of approximately $100M, $18M cash and just $5M debt. . .this undervaluation is more apparent when we consider that it has the Taylor mine in its pipeline, which will be the company's lowest-cost producer while increasing annual production by nearly 50%. . .I recommend the company."

"St Andrew Goldfields Ltd. is one of Primero Mining's neighbors. St Andrew has been working toward getting the Taylor mine up and running. Once that mine is in operation, St Andrew's mill would be east of Black Fox and Primero's Stock mill whereas Taylor is west. St Andrew would effectively be passing right by Primero's mill to travel to its mill. Do I think that there could be further consolidation in the district? It's possible but I don't think that is as likely. Developing working agreements between companies to improve efficiency is a more likely outcome in my mind." read more >

"One company that I cover is St Andrew Goldfields Ltd. Primero Mining bought Brigus Gold and its Grey Fox gold deposit, which is next to St Andrew's Hislop gold mine. The whole area is crying out for consolidation. . .Primero started a process that is going to continue and St Andrew will be part of that consolidation at the end of the day. . .St Andrew is a very inexpensive junior producer that produces about 85,000 oz per year and that's not exciting the market. Some of these junior producers need to merge to reach a critical mass so that they can afford their fixed costs. There are potential synergies in the old Brigus and St Andrew because they're right next to each other. . .St Andrew is mining efficiently. It is increasing the throughput at the Holt mill, which is an extremely good asset. Its main asset is the Holt mine. Next door to it is the Holloway mine and farther down the trend is Hislop. The Holt mine produces about 85% of its profits. [St Andrew's current all-in costs] are about $1,050/oz. The company published its earnings in mid-August, and those were nil versus nil so that's nothing to jump up and down about. I'm recommending it because it's very inexpensive and I see it as part of the M&A potential of that area." read more >

More Expert Comments

Experts Commenting on This Company

Randall Abramson, Fund Manager – Trapeze Asset Management
Michael Fowler, Senior Mining Analyst – Loewen, Ondaatje & McCutcheon
Jeff Killeen, Analyst – CIBC World Markets
Florian Siegfried, Senior Portfolio Manager – AgaNola

The information provided above is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.
Investing Highlights
Consistenly delivering on objectives - 14 quarters of positive operating cashflow
120 km of highly prospective land in the world-renowned region of Abitibi
Great potential for organic growth
catalyst Calendar
St Andrew Goldfields Ltd. Content