|
|
|
|
August 27, 2010 Dear Friend,
We raised our
long-term Nevada output estimate by 25% to 2.0 mm oz,
our earnings estimates and estimated NEM added 15 mm oz
at the "Mike" deposit in 2013-16, 2 mm more than
previously to Leeville underground mine reserves and 3.7
mm more to the "greater" or westwards extensions to the
Gold Quarry open pit. "Mike" lies 1 mile northwest of
Gold Quarry, which has produced 25 mm oz and retains 8
mm oz in reserves, and NEM geologists and engineers
describe "Mike" as the same size, shape and ore grades
as Gold Quarry. They think they hit the jackpot,
although it may take 500 km of drilling, much
metallurgical tests and lots of permits to "prove they
hit the jackpot" over the next 3 to 6 years. We raised
our price target to $60 from $54, and raised our rating
to Neutral from Underweight.
You may enjoy the
eight photos we included in our report from our August
16-17 visit to Newmont in Nevada.
We estimate that
Thompson Creek will double its post-2013 earnings with
the Mt. Milligan copper-gold mine operations. We are
pleased that it has broadened to add copper-gold
revenues, because the historic monthly standard
deviation of the molybenum prices since 1987 averages
$15 per lb. We maintained our $13 price target because
we used a 9% discount rate, harsh by current interest
rate standards, owing to the 8% to 11% implied interest
rate in the Royal Gold financing that Thompson Creek
selected.
Faithfully,
John C. Tumazos, CFA
|
Copyright © 2008 John Tumazos Very Independent Research,
LLC
|
