added a second AUY tranche at 3.97, a modest NEM starter at 54.40. as always DYODD
Senor
Interesting week in that if a miner reported even a "whiff" of a miss in earnings/revs/cash flow/costs it got hammered. NEM had the worst report of the week, I did not think AEM's miss was nearly as bad as production there is growing and they have the KL merger getting done in months ahead. Bot significant AEM positions yesterday. AUY was really not on my radar but when I looked at it I liked the wave count and when I started looking at the earnings report and smash down around 6% yesterday and saw how near to the years lows we were and what I count as 5 up I bot there aggressively late in the session. Also at Fridays close it yielded 3%. Here's a report I saw from TD on AUY:
"
TD ReportEvent: Last night, Yamana reported Q3/21 financials. Conference call is today at 9:00 am ET (Dial in: 1-800-806-5484 or 416-340-2217).
Impact: SLIGHTLY POSITIVE
Adjusted EPS of $0.07 was effectively in-line with our estimate and consensus of $0.08. CFPS was reported at $0.21 (TD: $0.21, consensus: $0.22).
Q3 production of 226k oz, slightly above our estimate of 220k. Production was stronger-than-expected at El Penon, due largely to higher grades in the quarter. Cerro Moro had a weaker-than-expected quarter of production as a result of lower recoveries of ~85% (vs. TD estimate of 95%) due to high clay content, which caused sedimentation and clarification challenges in the processing. Steps to improve recoveries have been taken and Q4 recoveries are expected increase to approximately 93%.
Operating Costs: Total cash costs were reported at $702/GEO (TD: $707/ GEO). Q3/21 AISC was $1,041/GEO. Operating costs were higher-than-expected Cerro Moro due largely to the lower production. Costs were lower-than-expected at Jacobina due to higher throughput and grades. AISC on a GEO basis for September was ~10% lower than the quarterly average; the company expects strong cost performance in Q4.
Free Cash Flow of ~$110mm was generated in Q3, with $93mm of capex incurred. We expect even stronger FCF in Q4.
Balance Sheet: Yamana ended Q3 with $460mm of cash and equivalents, compared to $702mm as at the end of Q2/21, due largely to debt reduction of $222mm during the quarter. Long-term debt stood at $773mm as at quarterend. The company had available credit of $750mm as at September 30, for total available liquidity of $1.2 billion.
Impact of inflationary pressures on costs: The company noted there has been a modest impact on costs from inflationary pressures, which are expected to continue into the fourth quarter. Yamana expects upwards of $20/GEO of inflationary pressure on costs not originally anticipated at the start of the year (which is reflected in our estimates)
BUY Rating: 12 month price target: $7.00"
Did it "deserve' the smash it got? or is this a classic mkt over reaction when everything else is being sold? Who knows for sure but the wave count and risk/reward look attractive to me
Senor
