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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Veteran98 who wrote (205445)	10/26/2011 11:54:15 PM
From: Veteran98	Read Replies (1) \| Respond to of 312405

JAG.. Real nice bounce the last several days after picking up a bunch as low as 4.15...Hanging in for the long term.... I've managed to take money off the table at higher prices and buy it back cheaper several times now. JAG has definitely been volatile.... Jaguar Mining (NYSE: JAG) Putting Past Issues Behind Them, Setting Up as Strong Gold Mining Investment Opportunity otcequity.com Posted on October 26, 2011 by Editor Sometimes emotion can cloud judgment and when it comes to investing in a company allowing emotion to get in the way can cost an investor serious money. A case in point is Jaguar Mining (NYSE: JAG), a mining company that concentrates on the production of gold, as well as in the acquisition, exploration, development, and operation of gold mineral properties in Brazil. While the company is coming off an impressive third quarter in which they recorded record gold sales and record revenue there still appears to be a feeling of unease or distrust among investors as it relates to the management of JAG. Certainly there may be some issues that warrant that unease but as with any business there are problems that arise that can alter a company’s operations, especially in the mining industry. JAG management was hammered for revising their 2011 guidance, reducing their full-year guidance from 200,000 ounces of gold to a range of 155,000 to 163,000 ounces yet that would still mean a double-digit percentage increase in production over last year. Sure there were plenty of investors who opted to take a position in JAG following the initial guidance projection and many of them may feel that management was either inexperienced or overly optimistic with their forecast but that shouldn’t erase the fact that the company put together a strong quarter and anticipate further growth. JAG President and CEO Daniel Titcomb addressed the revision issue head-on saying “We are disappointed to have to make the adjustments to our guidance. We believe our production targets of over 200,000 ounces annually from our three current operations are achievable in the near future, but we are clearly not there yet with the continuing mill issues at Paciência.” The mill issues that Titcomb refers to are mechanical issues at their #1 and #2 ball mill at the Paciência processing plant, issues that significantly affected their recovery of gold ounces at the mine. According to JAG, “The full re-design and repair of the drive components in both mills is expected to be completed in the first quarter of 2012.” No JAG shareholder wants to hear that there will be “periodic interruption of milling operations” during the fourth quarter but the issue the company is facing isn’t a complete catastrophe, they haven’t lost mining rights and their not facing the prospect of government interference in their operations. It would be understandable if investors wanted to find the right entry point before staking position in JAG but right now shares are trading around the 4.48 – 4.68 range with steady volume. Having fallen to a 52-week low of 4.03 last week it appears as if many investors have already found their entry point and are betting on the company’s future success. For those who are still sitting on the outside JAG remains below their 50-day moving average of 5.56 and their 200-day moving average of 5.31, both marks that the company could easily hit in the near future. Of course there’s more to JAG’s ultimate success than just gold production, there needs to be a demand for the metal. Up to this point gold has proven to be an investors dream with prices climbing above the $1719 mark and rising but there are those who believe that gold prices could suffer due to China’s efforts to slow their economy and control inflation as well as the strengthening of the American dollar due ongoing debt crisis concerns in Europe. That being said the World Gold Council estimates that Chinese gold demand could actually double over the next decade and with China being the second largest buyer of gold in the world that could prove extremely beneficial to gold mining companies. What should be encouraging to JAG shareholders and potential investors is the fact that the company isn’t simply sitting on their three Brazilian fields, they expect to have two more exploration projects coming online in the near future. JAG is a proven producer of gold and while the company may be better off if management limits their guidance and simply concentrates on output it shouldn’t change the fact that they are not only an attractive investment opportunity for investors but to larger gold producers looking for under-producing fields or undeveloped projects as well. While it is understandable that shareholders are frustrated with JAG’s struggle to produce profits and the issues that have slowed progress it shouldn’t be forgotten that they control nearly 7.5 million ounces of gold across their three Brazilian mines and have two more exploration and production projects coming online. It would certainly stand to reason that the issues that have held JAG back will be sorted out and when the company begins to operate at its full capacity their share price may be well above its current cost. This entry was posted in Articles, NYSE and tagged china, gold mineral, gold mining, gold ounces, gold sales, investors, jag, jaguar mining, nyse, penny stocks. Bookmark