Lundin says buy New Gold NGD-T

2009-09-23 19:44 ET - In the News

Brien Lundin, in the September, 2009, edition of the Gold Newsletter, says buy New Gold Inc., recently $3.36 (all figures U.S.). This is the first time Mr. Lundin has recommended the gold company. The newsletter editor says that 33 days after completing a $1.2-billion (Canadian) business combination with Western Goldfields Inc., New Gold had to eat a $190-million goodwill impairment charge on the deal in its second quarter financials.

Add to that foreign exchange losses of $31-million and the company ended up with a net loss of $203-million or 79 cents per share. Still, notes the goldbug, it was better than expected. The acquisition will add 140,000 to 150,000 ounces of gold production this year.

Mr. Lundin says the company expects operational improvements to continue for the rest of the year, forecasting a 2009 gold production of 330,000 to 360,000 ounces at a net cash cost of $490 to $510 per ounce.

New Gold is also developing its New Afton project which it hopes will be in production by the second half of 2012. It expects New Afton to produce 85,000 ounces of gold and 75 million pounds of copper over a 12-year mine life. The newsletter editor tells his readers to buy on weakness.

Globe says Zechner believes Yamana is undervalued

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2009-10-07 09:17 ET - In the News

The Globe and Mail reports in its Wednesday, Oct. 7, edition that J. Zechner Associates chairman John Zechner recommends buying Yamana, which he considers cheap. Anwar Ali writes in The Globe's BNN Market Call column that Yamana stock jumped 85 cents to close Tuesday on the Toronto Stock Exchange at $12.05.

The stock has a 52-week range of $4.29 to $13.01. Mr. Zechner says, "Yamana remains one of the more undervalued stories among the mid-tier gold producers with strong copper byproducts and excellent production growth." In his general outlook Mr. Zechner says: "Our bullish outlook reflects our positive view of the impact of stimulus programs, low interest rates, the amount of money 'on the sidelines,' and that we are past the worst of the economic cycle. But markets have gained over 50 per cent from their March lows and economic data won't improve quickly, leading us to reduce exposure to financials. We're overweight positions in the resource sector."

The stock was trading at $10.49 on June 17 when The Globe's Scott Adams said Yamana appeared to be inexpensively priced. The Globe reported on April 15 that Sprott managers Charles Oliver and Jamie Horvat were bullish on Yamana. It was then trading at $9.90.