In early June, respected mining analyst Warwick Grigor predicted EBIT of 3.9 cents per share for GTM in 2005 i.e. a PER of just 2.7 - and that was before the share price plunged to its current level of 7.1 cents. Grigor also flags the possibility of a 6.4% dividend and around 100,000oz production.
Grigor also maintained that 'there is no premium for quality of profit margins, management or blue sky potential.' IMO, GTM has lots of the latter.
Given that GTM has just announced a trebling of its resource at Malbec West and that aggressive drilling continues at several high grade gold targets, I am optimistic that the quarterly due Friday will illustrate the excellent progress being made.
GTM has reiterated that it aims to produce 100,000oz per annum and has the excess capacity at its Warrego plant to exceed this. With 75,000oz hedged at A$595 and the possibility of feeding in extra ore from its unhedged reserves at Cat's Whiskers, Edna Beryl etc, GTM also has good exposure to a rising spot price if we see a turnaround in coming months.
About the only thing GTM does not have going for it at present is market sentiment. However I believe that sound fundamentals always out in the long run and GTM has these in spades.
A solid quarterly just might be the fillip it needs. I topped up at 7.3 cents and - with my usual impeccable timing - missed the bottom; it's currently 7.1 cents and very cheap on fundamentals. Chartists might not like it though so conduct your own research.
Any other predictions out there on near-term movements?
TIA,
Gupper
GTM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
