Home > Updates > YNG: Hits 102K steady state, on track for 150K

YNG: Hits 102K steady state, on track for 150K

YNG announced they have hit a steady state of 102K of production and are in the process to hit the 150K of production.

Chief Operating Officer Graham Dickson confirmed that “subsequent to re-start, the company has produced for the month of July a total of 8,500 ounces of gold with part of the tertiary crusher line down, under less than optimum operating conditions. It is confidently expected that a rate of 12,500 ounces of gold per month is more than sustainable on an ongoing basis”.

At 102K ounces of gold per year we are looking at close to $40-50M of FCF ($500 x 102k minus some CapEx and SG&A) per year. For a company to be trading at a market cap of 250M, it is extremely cheap valuations. We just have to wait for the market to start realizing the disconnect.  (My expected cash flow is extremely conservative as I use $1,000 for gold price and $500 for cost of production. The current market price for gold is much higher).

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Categories: Updates
  1. segemran
    August 11, 2010 at 8:46 am

    Im trying to understand this investment, specially the business since its the first mining company im analyzing.

    How do you arrived at $500 cost/ounce? and what capex do you use? D&A proxy to manteinance?

    Thanks,

    • parasd
      August 11, 2010 at 9:41 am

      I use ’round about’ numbers to come up with the cost and sales price per ounce. The actual cost per management’s presentation is around $465 and spot price is around $1,200, so actual gross profit would be $735/ounce which is much higher than my conservative $500/ounce. As for CapEx, I expect the capital requirements will be minimal in the $1-3M range. The CapEx are already frontloaded as the mine is already equipped and producing. You can get a sense of the operating expenses by looking at the PY 10Ks. I see S&A in the $5-6M range.

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