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Strategies & Market Trends : Ride the Tiger with CD
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To: Veteran98 who wrote (201239)7/21/2011 9:37:55 AM
From: mimur1 Recommendation  Read Replies (1) of 313094
 
another view / scotia institutional sales this am /////

While LSG’s Q2 Results “Don’t Impress Me Much”…Sell Off is Overdone for this Timmins Gold Story: While there’s no doubt that Lake Shore Gold (LSG-CN, not covered) disappointed with the recent Q2 production update and reduced 2011 guidance (after lower 2010 guidance multiple times last year), Scotia Mining Sales now sees the sell off as overdone with shares in the sub $2.50/sh range representing a significant buying opportunity. Reduced 2011 guidance of 85 – 100k oz gold should be achievable and recent new hires Dan Gagnon and Brian Buss from Vale Inco bring a new level of operational expertise to the company. Even at higher costs (say full year averaging $750/oz vs. previous guidance of $575/oz), the company should generate significant cash flow this year, which combined with ~$60mm in cash plus an undrawn $60mm credit facility should fund the $75mm in capex and ~$30mm in exploration. And with a large gold endowment at both of the company’s operations (Timmins West and Bell Creek), the company is surely on the radar screens of mid-tier and senior gold companies looking for a foothold in one of the world’s best known gold jurisdictions.
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