Watch the video summary of the July 12th INK Morning report: The Leagold Mining (LMC) leveraged bet on bullion.
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Script:
Leagold Mining owns the Los Filos mine complex in Mexico and three mines in Brazil.
In Q1 ended March 31st, the company produced just over 105,000 ounces of gold which translated into EBITDA of US$38.4 million and net income of US$0.01 per share.
The company is now on a mission to potentially boost firm-wide gold production to 700,000 ounces and EBITDA to over US$300 million per year.Expansion of the Los Filos mine is a key element of the expansion strategy.
After the March release of a Los Filos expansion feasibility study, management rolled up its selves to sequence the timing of capital expenditures to maximize the use of internal cash flows.Under this phased approach, gold production at Los Filos is expected to peak at just under 500,000 ounces in 2021.
The accelerated road to production could prove timely if a gold bull market really picks up steam. Moreover, with a US$400 million debt refinancing package now closed, management hopes to avoid tapping equity markets.
Despite the news, the stocks remains range bound. Insiders, led by Chairman Frank Giustra, seem to be betting that investors will eventually appreciate the potential leverage Leagold offers to a firmer gold price.
Get our full report through INKResearch.com or via the Canadian Insider Club and always consult your registered investment advisor before investing. Good luck friends and thanks for listening!
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