Speaking of gold stocks you might want to look at RIC, it's been on my watch list for awhile...here's a write-up I found on it on the Yahoo thread although I haven't verified it...
From Merrill Lynch Richmont Mines?A Solid Operator Looking for Growth Kent Pearson
has initiated coverage of Richmont Mines (YRIC; C$2.15; D-2-3-9) with an
intermediate-term Accumulate and long-term Neutral rating. In the intermediate term, we
believe that Richmont would be fairly valued at C$2.80/sh given our calculated NAV (DCF
C$1.65 and cash C$0.82) and using a 1.2 times adjusted P/NAV multiple. Longer term, we
believe that the upside potential in the stock is limited given the company?s current lack of
growth opportunities. Richmont?s Mining AssetsIn Quebec, Richmont has a 100% interest in
the Francoeur Mine and a 50% interest in the Beaufor mine through its 69.3% interest in
Louvem Mines. The company also owns the Camflo mill through its 100% owned subsidiary
Camflo Mill Inc. The company?s third producing asset is the Nugget Pond mine located in
Newfoundland. Intermediate Gold ProducerFor 1999, Richmont forecasts net production of
about 83,000 ounces of gold at a cash operating cost of about $190/oz. Our 2000 estimate of
total production for Richmont is 93,000 ounces of gold at a cost of $186/oz. Solid
FinancialsFor 2000 and 2001 we forecast EPS of C$0.31 and C$0.34 and CFPS of C$1.00
and C$0.78, respectively, based on forecast gold price of $315/oz and $325/oz. Richmont
anticipates spending some C$21.1 million in capex on its operations over the next three years
(1999-2001). We show the company able to cover these expenditures from expected cash
flow, before capex, of C$36 million over this period.As of Sept 30, 1999, Richmont had cash
of about C$10.1 million, working capital of C$12.6 million, an unused line of credit of $7.0
million and no debt.
Chris |
