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Strategies & Market Trends : The Ego Forum
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To: loantech who wrote (12072)5/12/2013 10:19:08 PM
From: hubris33   of 12175
 
Good call on the management team! Now as far as ELG.to over all goes...... .....................

>>>>Would you or do you own this one?<<<<
Message 28664891

The key for ELG was the projected growth story of the Lupin Mine. Then ELG started making changes at the Bjorkdal Mine and that looks interesting:
  • rock bolting to reduce dilution with narrow vein mining
  • dumping the mining contractor
  • grade control drilling
This just makes a lot of sense.



Then there is the upside brought by exploration drilling.



Which doesn't look too bad.....compared to the 2 g stuff they have in the pit!


Remember McEwen's old saying... the best place to find gold is at an old mine!

Of course costs are going to be the key for ELG going forward. Cash costs were 1026 for 4Q12. Q We'll get 1Q13 results this week. Using AEM's formula for AISC, ELG came in around 1362 in 2012. Looks like some of the cuts already announced (8.7MM) could bring the AISC down to around 1180-1200/ounce. But we'll wait for the guidance later this week.

I am guessing that Lupin is dead unless costs can be cut drastically or POG recovers over 1600. I suspect Bjorkdal moves forward. Key there is getting the contractor kicked out in August and a smooth transition to owner mining and FULL implementation of the narrow vein mining techniques to reduce dilution. Then if they can work on some of the new veins and get the higher grades into the mine plan for 2014 ....

So is this a play on growth in Sweden? eh, it looks interesting, but uncertain, though new management has been making changes in the right direction. I think it is a wait and see, but we'll know more later this week.
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