allied gold - conference call

Having just finished listening to the Allied Gold conference call, my confidence in a reversal of the understandably poor share price performance should now occur. The appointment of new management and especially the COO Johan has begun to bear fruit. The Co. is maintaining FY guidance of 180k oz. It will not be easy to achieve, and be back end loaded, but the share price is certainly pricing in a "miss" at current levels. It appears that Capex has peaked and will continue to reduce in the coming quarters, with no major projects planned at this stage. meaning 2013 should see solid free cash generation. On costs they are confident of making the $850 guidance through a combination of initiatives, with the move to heavy fuel oil from disel generating 10.5 MgW some 30 to $50 less than conventional diesel, together with the higher production. On exploration, there will be a reserve update for Simberi in June (hopefully positive) following drilling of new areas and licences have been submitted for Tabar Island project. Conclusion - The shares look very cheap ( 4.3x earnings and 3.9x 2013) but this has been for a reason. The company has failed to deliver. Q1 may now be the turning point. I wouldn't expect anything spectacular in Q2, but an inline performance could set the shares up for a stronger move towards year end. The company has a VERY high quality list of shareholders and volumes are thin, meaning the shares could squeeze higher on finding a new buyer or two. I am a holder and feel much better about the Co.