Yamana Gold Revisited
On Nov 6th, 2008 2oversold.com blogged about Yamana Gold (NYSE - AUY) as a company investors may want to look at as the economy continues to weaken. It is our belief that eventually the precious metals will decouple from trading in tandem with the market and the sector will emerge as one of the new market leaders.
With that said let’s recap a portion of the original blog:
Yes I realize that the price of the precious metal has come off from its high but I also believe that investors still see gold as a safe haven. And as we see more turmoil and uncertainty in the markets I think we will see more interest in these gold companies. 2009 may be a year everyone will wish they had added some gold to their portfolio.
At $4.67 a share I think Yamana Gold ( NYSE-AUY) is well worth a look and simply 2oversold.
Read full Yamana Blog Here
Yamana Gold closed trading on Friday at $5.81 up about 25% from our blog on Nov 6th. Is this too much too fast?
To answer this question we need to explain the way we look at companies. 2oversold.com attempts to find value in current market events and situations. Yes +25% in less than 30 days is a nice return and those who might wish to protect profits in this type of market might wish to take some off the table. That is a personal choice of course. 2oversold.com makes no recommendations at all on what stocks to buy, sell or hold or when to do so.
Now as far as Yamana Gold (NYSE- AUY) the company and the recent rise in price goes, this is much as we expected and what the Yamana Gold Blog entry was about. We continue to think that the market will continue to see downward pressure in the near future and that many of the precious metal companies will start to garner the investor attention once again.
So while we agree that Yamana Gold has seen a nice move up since our original blog post, we still consider Yamana Gold as 2oversold given our projection for the overall market and economic situation in the near term.
Comments are welcome on this 2oversold.com opinion. Registration is not required but you must have one (1) approved comment before your postings will show instantly.
UPDATE 1-Yamana Gold in C$100 mln equity financing deal
Dec 10 (Reuters) - Canadian gold miner Yamana Gold Inc (YRI.TO: Quote, Profile, Research, Stock Buzz) said Canaccord Capital Corp and Scotia Capital Inc agreed to purchase 16.7 million shares of the company on a “bought deal” basis at C$6 per share for resale to the public.
Yamana, which sees gross proceeds of C$100.2 million ($79.78 million) from the offering, said it will grant the underwriters an option to purchase up to an additional 2.5 million common shares at C$6 per share.
Yamana said it expects to use the net proceeds for ongoing operating and working capital requirements.
Shares of Yamana closed trading at C$6.60 Tuesday on the Toronto Stock Exchange.
($1=1.256 Canadian Dollar) (Reporting by Krishna Chaithanya in Bangalore; Editing by Deepak Kannan)
Source: http://www.reuters.com/article/marketsNews/idCABNG40007020081210?rpc=44
[...] Now 2oversold.com is not what one might call a “gold bug” site. In fact we have only written an opinion about one other gold company to date and that is Yamana Gold. (You can read our latest blog on Yamana Gold here Yamana Gold Revisited [...]
Press Release Source: Yamana Gold Inc.
Yamana Gold Declares December 2008 Dividend
Thursday December 18, 4:30 pm ET
TORONTO, ONTARIO–(MARKET WIRE)–Dec 18, 2008 — YAMANA GOLD INC. (Toronto:YRI.TO - News)(NYSE:AUY - News)(LSE:YAU.L - News) today announced its December 2008 monthly dividend of US$0.01 per share. Shareholders of record at the close of business on Wednesday, December 31, 2008 will be entitled to receive payment of this dividend on Wednesday, January 14, 2009. The dividend is an “eligible dividend” for Canadian tax purposes.
Source: http://biz.yahoo.com/iw/081218/0461839.html
[...] about some individual companies we think might do well in during such a storm. Companies like Yamana Gold (AUY) Mad Catz (MCZ) and Mattel (MAT) just to name a few but there are many more. The companies that I [...]
[...] I think this bodes well for the opinion we currently have that gold related companies such as ( Yamana Gold, Northgate Minerals, and Western Goldfields ) may do very well in [...]
6:35AM Yamana Gold sees gold production of 1.3 mln to 1.4 mln GEO in 2009, in the range of previous guidance; announces ‘09 & ‘10 operating outlook and ‘08 performance (AUY) 6.43 : Co’s Gold production is expected to be in the range of 1.3 mln to 1.4 mln gold equivalent ounces in 2009. Yamana had previously guided in October 2008 a specific production expectation with a +/-7%
variance and this range is consistent with this past guidance.
Production is projected to increase to approximately 1.4 mln to 1.5 mln GEO in 2010 from mines currently in production. Capital expenditures for 2009 and 2010 are expected to be approximately $350 mln and $400 mln, respectively, including sustaining capital of approximately $130 mln each year. For 2009, Yamana has approximately 50 mln pounds of copper sold forward at an average of approximately $3.00/lb.
Yamana expects to derive more than 80% of its revs, cash flow and profit from precious metals production this year and estimates this number will increase into 2010 and beyond. Total production during the Q4 from all mines owned by Yamana was approximately 255,000 GEO at cash costs on a co-product basis is estimated to be approximately $385 per GEO which compares very favorably to costs in the Q3 of 2008. For the month of December 2008, production increased from November to approximately 89,000 GEO and cash costs decreased to approximately $356 per GEO on a co-product basis, further confirming a downward trend in costs.
For the year-ended December 31, 2008, production totaled approximately 1,000,000 GEO at cash costs of approximately $385 per GEO on a co-product basis plus approximately 140 mln pounds of copper at Chapada at a cash cost estimated to be approximately $1.00 per pound on a co-product basis. Yamana expects production to increase from the first quarter in 2009 with costs trending lower as production increases and input costs continue to decline.
Aggregate production for the first quarter is expected to be approximately 290,000 GEO. Cash costs per GEO on a co-product basis are expected to be approximately $345-$375 per GEO for 2009.
Source: http://finance.yahoo.com/marketupdate/inplay#auy