CGA Mining Limited (TSX Code : CGA, ASX Code : CGX) is pleased to report a record monthly production of 20,007 ounces of gold for May 2012 (previous record, 18,318 ounces in December 2010). The record ounce production came from processing of 642,816 tonnes (also a record, with the previous record being 605,330 tonnes in May 2011) at 1.15g/t Au head grade and an average throughput rate of 919 tonnes/hour.
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ZurboThis record production comes on the back of decent quarterly results which has CGA trading at a forward P/E of about 9 times. Were it not for the sub-$1,000/oz hedges the earnings ratio would be closer to 5 times. Unfortunately these hedges run through the end of 2013 and it seems most investors are either too dull to notice or would prefer to revisit the story later rather than suffer any further bumps along the way.
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Attached is link to my projections for CGA
https://docs.google.com/drawings/d/1und9QP-hIsCpdMBUwJwDYdjL80IcBVdI3yfvRdy2d5A/edit
@amarkscpa
Much appreciated. Obviously if CGA can achieve 5-6 P/E while paying down their hedge that’s mighty compelling. I suppose we have to start working about taxes sometime in 2016-2019 depending on whether or not they get 2 year tax-free extension, but that’s still at least 2-3 years of tax-free and hedge-free production.
@Zurbo
We should know more about new Philippines mining tax legislation this month. Here is best link for current mining tax news:
http://philippineminingclub.com/category/news/
Philippine mining tax should be resolved soon because of Xstrata/Tampakan mine. Any new mining law will reduce uncertainty, which has likely impacted share price.
At worst, the IMF proposal for Phillippine mining tax would increase the excise/royalty tax from 2% to 7%. I would expect CGA to be grandfathered until at least 2014.
Nice spreadsheet Amark.. If I read it correct it uses quarterly numbers. The gold sale hedges at $880/oz cost them about $11M/Qtr in revenue but they only hedged about 25% of production (14,563 vs 56,000 and rising) per quarter. they still will have revenue of $83M/Q3
When I first read the messages on hedging I assumed the worst and thought they had been forced to hedge nearly 100% of production which would have been horrible with a spot gold price nearly double their low hedge price. Hedging 25% costs them some money, but they still have 75% of their production unhedged which makes them more like an unhedged company than a hedged company. (Like Barrick used to be, heavily hedged) My point is that I’m not troubled by 25% being hedged since it will roll off next year and the prospects for the company look good then I’m inclined to get some more CGA in my account.
@danno24
Also note that all hedges will be gone by November 2013.
B2Gold to acquire CGA Mining. Recently have been on a hot streak, CGA is my largest holding…and St Barbara popped 25%.
CANADA’S B2Gold has agreed to buy Perth-based CGA Mining in a $C1.1 billion ($1.08 billion) scrip deal as consolidation in the sector continues. It is understood the deal, which will create a $C3bn miner, will be unveiled in Canada overnight.
Gold sector takeovers are expected to drive mining mergers in the short term as gold prices remain high but access to development funds for smaller miners remains limited.
There is also a call from investors for the smaller miners to combine and grow in scale to reduce specific-project risk.
CGA shares are in a trading halt after last trading at $2.55, giving the company a market value of about $850 millon. The deal is believed to be at a premium of about 25 per cent on the last-traded price.
CGA, which is listed in Australia and Toronto, produces about 100,000 ounces of gold a year from the Masbate gold mine in the Philippines.
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CGA/B2Gold
Go to 15 minute mark of B2Gold Denver Gold:
http://www.denvergoldforum.org/dgf12/company-webcast/BTO:CN
@amarkscpa
” Recently have been on a hot streak”
Duly noted. Respectful kudos, amarkscpa!
After your ‘heads up’ on SBM.ax, I was checking it out this past w/e and have been spectating the sp appreciation.
I have a position in ASX listed Troy Resources TRY.to and thought it curious that TRY was not presented as a comparable on the presentation slide featuring the relevant ASX miner universe.