We recently took the time to dig deeper into Anaconda Mining Inc. (TSX:ANX, $0.395) and are publishing our initial estimates. We came to the conclusion
that Anaconda is an undervalued Canadian producer with significant medium-term cash-flow growth on the horizon and near-term catalysts that should
close the valuation gap to peers. A summary of our work can be found in this video or below, and our full report can be downloaded here.
An undervalued Canadian producer with significant medium-term cash-flow growth on the horizon and near-term catalysts that should close the valuation gap
Key Reasons We Like Anaconda:
Get 2 Projects for the Price of 1
• Our estimates suggest that at the current EV of $41M investors are paying for either Point Rousse ($58) or Goldboro ($116)
• For Point Rousse, we assume no upside beyond Argyle – although resource growth potential exists both at Argyle and other targets
• For Goldboro, we have based our estimate on the conservative PEA – room for resource growth as well as operating and capital cost improvements
Production Expected to Grow to 55 koz per year by 2021 – Positioned to Further Consolidate
• We forecast production growing from 18 koz in 2018E at US$1,335/oz All-In Cash Costs* (AICC) to 55 koz per year by 2021E at US$915/oz
• As well, the company is well positioned to add additional assets in Atlantic Canada
Proven Track Record in a Tier 1 Jurisdiction
• Current management has demonstrated an ability to generate cash from the small-scale Point Rousse, allowing it to repair the balance sheet while growing
• Newfoundland and Nova Scotia have proven themselves to be two of the better mining jurisdictions in the world
• Ongoing drill results from Goldboro & Point Rousse
• Increased production & cash flow in H2 2018
• Ongoing development activities from Goldboro
• Ongoing review of Atlantic Canada consolidation opportunities
Derek Macpherson | VP Mining Analysis
Victoria Ellis Hayes | Associate, Mining Analysis
Alex Pitcher | Associate, Mining Analysis
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Anaconda Mining Inc. - TSX:ANX - 1,3,4
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