self funded, profitable company $12 m m/c

This little company was only recently brought to my attention and have to say IT looks to good to be true. So i have done my research and come to the conclusion this little gem has been flying well under the radar of many and should be trading at multiples of the current sp.

Why u may ask...? Heres a little run down...

The company owns 2 drill businesses, one operating in Brazil and the other in Uruguay. Between the 2 they achieved revenue os over $5.3 million last quarter up from $4.5 m the quarter before. Shows the business is growing and company states that it will increase further in the future. Its also good to see the company owns the drill rigs they are using but also has hired and extra 4 rigs to keep up with the demand.

The company has also started trial mining at their Ze Vermelho project with a targeted mining rate of 40 tonnes per day over the past three months which equates to about 3,600 t of ROM being processed last 3 months compared to 1,139 t of ROM in the March quarter which yeilded the company over US$1m in gold sales, so i would expect this quater to be more then last. Im not looking for the 3,600t that was targeted but more or less around the 2,000t mark which would show good progress and a double in gold revenue.

I also note that expenses were more last quarter as $1.7 million debt was paid off and minning equipment was bought so they would no longer have to waste money hiring the equipment for there gold operations so lower costs this quarter should be seen as a result and higher profit margins.

All of the above should point to CGM bringing home a nice little Profit again this quarter and show investors that the current operations are self funded and profitable.

For a company with such a small market cap it is making a very nice profit of $2 million going by last quarter and expect that to increase to about $3 million this quater due to an increase in gold production and a reduction in operating expenses as we now do not pay for the hiring of the equipment used for gold production.


Taken from the last quarterly:

"Ze Vermelho continues to be self funding with gold sales meeting all operating and capital expenditure requirements.
Construction of a gold room and explosives magazines has been completed. Crushers, impactors, generators and other equipment have been purchased to replace equipment
previously on hire. Construction of cyanidation ponds and the treatment circuit is expected to recommence in May when the rainfall subsides. It is expected that yanidation can commence in late July"

All looks very promising in the coming months, which should see increased production and increased profits.

We also have to look forward to the results from the drilling campaign to establish a JORC for the Ze Vermelho project. Lets not forget the bonanza grades that have been found there to date.

All very exciting and hope this helps educate some on what CGM are about and what they are turning into. If i have missed anything please feel free to share it.

Good luck all...