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

To: tyc:> who wrote (206075)	11/11/2011 12:08:05 PM
From: Veteran98	Read Replies (1) \| Respond to of 312498

LSG... yes not exactly stellar results.... My average cost is 1.44 as I picked up a very large amount at 1.31 and 1.38..... My strategy was a play on better results than this so I'll probably start downsizing into any future strength.... Longer term still looks may be a pretty good bet on a turnaround but I own way too many shares right now Lake Shore Gold Corp. \| Wendell Zerb, P. Geol, 1.604.643.7485 LSG : TSX : C$1.71 \| C$684.0M \| Hold , Target C$2.15 ? •Weak Q3/11; outlook, lighter shade of grey; maintaining HOLD and increasing target to C$2.15 (from C$2.00) Investment recommendation We are maintaining our HOLD rating, and increasing our 12-month target on LSG to C$2.15 (from C$2.00) based on near-term resource growth and exploration upside. Given current operating challenges and longer-term expansion plans, we believe an improved operational outlook remains at least 9-12 months away. Investment highlights • LSG’s reported loss in Q3/11 was -$5.2 million or -$0.01 per share, while operating cash flow was $9.1 million or $0.02 per share, in line with our estimate. The results were based on pre-released sales of 16,570 oz Au, and production of 18,833 oz Au at cash operating costs of US$884/oz. • We maintain our cautious view on LSG in view of the operational difficulties encountered at Timmins. A longer-term operational turn-around will likely be based on upcoming resource estimates and scoping studies for the Thunder Creek and Bell Creek mines to better define plans to feed an expanded 3,000 tpd mill by 2013. • LSG has a cash and equivalent balance of C$47.6 million, plus US$30 million in undrawn credit from a revolving credit facility, which combined with production cash flow appears at present to be sufficient to fund mill expansion and underground development plans into late 2012. Capital expenditure and production plans for 2012 are still being defined by the company. Valuation Our 12-month target of C$2.15 (from C$2.00) is based on a 0.75x multiple on our revised NAV (5%) of C$1,129 million, using our peak Au scenario of US$1,750 per ounce.