HI there,
This is a late stage exploration and development company that is about to enter commercial production - next quarter by the looks of it. The company's flagship project is located in Red Lake - one of the prolific gold jurisdictions in the world. It is a high grade mine and has many years of potential expansion ahead of them.
Usually, i tend to stay away form E&D companies as they years away from production, or construction is just getting started. This usually ends up in delays, more $$ needing to be raised etc. They usually come with considerable risk. With Pure Gold it is different because they will now start to generate revenue.
In total Phase 1 which is expected to span 12 years is expected to generate $2.3B in revenue and $1.2B in free cash flow. In year 1 - it is expected to produce 59K ounces and achieve a peak of 125K oz over this period. It has an attractive growth profile and has plans to expand to higher production beyond Phase 1. It is alos a lower cost mine with AISCs expected to average $757/oz in Phase 1. An important note, those revenue and cash flow estimates were based on $1,800 an oz - gold has since corrected. But even at say $1,500 an oz, it will still be producing lots of strong cash flows due to it being a low cost mine.
Official production is expected to come next quarter and it is trading at around 12 times forward earnings. Decently priced, but still more expensive than many larger gold players.
I like the company and what i see, but it is likely to be more volatile than the norm. Furthermore, given how many seniors have been beaten up, there is better value right now in some of the larger gold players. Food for thought.
Mat