From my brief investigation of AQG, the main issue is that they are going to go ahead with the very large capex for extending the life of the mine. $800+ million is not small change. Especially, when they are already sitting on $320 million in cash. The new project has an IRR of 20%, which is passable, but when there are so many quality projects the world over dying from a lack of funding, I wonder if the 'market' is unhappy with their current plans.
If AQG had a longer life of the current project, I would agree they are extremely undervalued... but unless they change their long term plan. It will not provide any sort of dividend until perhaps 2020. Which I must say is ages away.
If you want gold exposure in a ASX listed stock, for downside protection perhaps AQG is a decent fit, hence my hold sentiment. But would I buy it, no, lots of other stocks with small E/Vs and longer mine lives.
AQG Price at posting:
$2.22 Sentiment: Hold Disclosure: Not Held
