I would also expect a strong recovery in this stock to $3.50 and above in FY11.
Stock had a very poor FY10. Revenue was $96.8m and NPAT only $2.8m. Poor 2010 was due to deferred production of high grade gold due to ventilation issues (they couldn't get tho the stuff in the time frame and cost they anticipated-----> is anyone surprised??).
Despite this the stock has been oversold....a point people are seemingly catching onto with the recent run it's had against the trend of similar small caps in the sector.
The company has given guidance of 100koz production in FY11. The ultimate goal of the botched expansions in 2010 is to get the production to 120. If the guidance is met (i strongly expect it will be) the revenue rise should lead to the stock being re-rated. Average cost of producing in FY10 was $675/oz. It has risen, but still one of the lowest cost producers on the exchange.....would expect it to decrease again if they are doen fiddling about.
Any positive news from exploration projects would be a bonus catalyst aswell, especially from Calingri (copper)
In short it has been hammered in FY10 relative to it's peers. A big rebound in price is a given IMHO provided they get to 100koz or near it.
DOM Price at posting:
$2.86 Sentiment: ST Buy Disclosure: Held
