Thursday, August 7, 2014

Lake Shore Gold - In My Opinion This Is One Of The Best Gold Miners

Lake Shore Gold is a Canadian gold miner operating three gold complexes in the Timmins Gold Camp (Canada).
The company (ticker NYSEMKT:LSG) has made a huge progress most recently. The stock price action mirrors the company management's work. Let us look at the chart below:

To illustrate what happened in the company's fundamentals, please, look at these charts and numbers below.

Some of the numbers were adjusted to make them comparable - the quaterly ebitda, cash flow from operations and gold ounces produced were multiplied by a factor of 4 to compare them to the yearly numbers.

As you see, LSG extracts gold from higher grade deposits - for those not familiar with gold, grades etc. it means that LSG is digging in the rock with higher quantity of gold. Which is good.

LSG is ramping up its production- in the second quarter of 2014 it extracted 52,300 ounces of gold which, adjusting it to the whole year, makes around 200,000 ounces a year (actually, the company plans to extract around 160,000 ouces of gold, which is more than in 2013).

And the most important thing - cash flow from operations. LSG is not digging gold - it is digging cash. And it is a lot of cash. Taking into account that presntly the LSG enterprise value stands at $565 million it means that the investment in LSG shares should pay back in 3.6 years. Not bad.

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