BRD... here we go the Canaccord report ... Brigus Gold Corp. Steven Butler 1.416.869.7918
sbutler@canaccordgenuity.com
John Kratochwil, PEng 1.416.869.6592
jkratochwil@canaccordgenuity.com
Adam Melnik, MBA 1.416.687.5428
amelnik@canaccordgenuity.com
BRD : NYSE MKT : US$1.05
BRD : TSX
BUY ?
Target: US$2.10 ?
COMPANY STATISTICS:
52-week Range: US$0.69 - 1.52
Avg. Daily Vol.: 885,382
Market Cap (M): US$272
Shares Out (M) basic: 259.2
Shares Out (M) fd: 267.0
LT Debt (M): US$86
Working Capital (M): US$43
EARNINGS SUMMARY:
FYE Dec 2011A 2012E 2013E 2014E
Gold Eq. Production
000oz: 56 77 101 110
Gold Eq. Total Cash
Costs (US$/oz): 332 749 677 657
P/E: (37.4) 9.5 4.3 3.7
CFPS (US$): 0.08 0.25 0.35 0.33
P/CF: 14.0 4.3 3.0 3.1
EPS (US$): Q1 (0.03)A 0.02A 0.06E 0.07E
Q2 (0.01)A 0.02A 0.06E 0.07E
Q3 0.01A 0.02A 0.06E 0.08E
Q4 (0.00)A 0.05E 0.06E 0.07E
Total (0.03) 0.11 0.24 0.28
SHARE PRICE PERFORMANCE:
Source: Interactive Data Corporation
COMPANY DESCRIPTION:
Brigus Gold is focused on exploration and development
of precious metals projects in North America; under the
stewardship of Wade Dawe, President and CEO. The
company's cornerstone assets include the Black Fox
mine and satellite Grey Fox project near Matheson,
Ontario and the Goldfields project near Uranium City,
Saskatchewan. These assets contain a gold reserve base
of 1.86 Moz and measured, indicated, and inferred
resources of 1.04 Moz.
All amounts in US$ unless otherwise noted.
Metals and Mining -- Precious Metals and Minerals
Q3/12 RESULTS DEMONSTRATE
LOWER BLACK FOX COSTS AGAIN
Investment recommendation
We reiterate our BUY rating on Brigus Gold following the release of
Q3/12 results which continued to reflect the trend of lower unit costs (Q1
$858/oz, Q2 $799/oz, Q3 $728/oz). We continue to expect a sequentially
stronger fourth quarter with the incremental benefit of more
underground tonnage milled and the initial contribution from longhole
stoping in the West Zone.
Investment highlights
? Basic and diluted EPS was $0.04, but adjusted fully-diluted EPS was
$0.02 versus our estimate of $0.03 and consensus of $0.02. The
variance to our estimate was due to slightly higher than expected
G&A, due to the effect of one-time severance charges.
? The company pre-released Q3/12 production of 19,526 at 3.34 g/t.
However, sales were slightly lower at 19,064 oz. The trend of lower
cash costs continued in Q3/12, with lower cash costs of $728/oz
versus our estimate of $743/oz. Lower sales volumes were offset by
lower cash costs which was primarily due to lower underground
costs ($94/tonne versus our estimate of $100/tonne).
? Longhole stoping commenced in the West Zone at the end of Q3 and
is expected to ramp up to 400-500 tpd in Q1/13. In addition, the
10% mill expansion to 2,200 tpd is now essentially complete and in
commissioning mode, although we will maintain Q4 throughput
equal to Q3 levels, i.e., 2,075 tpd.
? In Q3, the underground mined at 473 tpd versus our estimate of 450
tpd. Our Q4 assumption is 575 tpd, ramping to 700 tpd in Q1/13,
800 tpd in Q2/13, and 1,000 tpd by Q1/14.
? Our 2012 EPS estimate has been revised to $0.11 from $0.12.
Valuation
We maintain our 12-month target price of US$2.10 based on 0.65x our
5%/peak NAVPS estimate of US$3.22 (previously US$3.20). The shares
remain undervalued at 0.47x 5%/spot P/NAV versus the junior average
of 0.71x, and 3.0x 2013E P/CF versus the junior average of 8.9x. |
