YNG: Hits 102K steady state, on track for 150K

YNG announced they have hit a steady state of 102K of production and are in the process to hit the 150K of production.

Chief Operating Officer Graham Dickson confirmed that “subsequent to re-start, the company has produced for the month of July a total of 8,500 ounces of gold with part of the tertiary crusher line down, under less than optimum operating conditions. It is confidently expected that a rate of 12,500 ounces of gold per month is more than sustainable on an ongoing basis”.

At 102K ounces of gold per year we are looking at close to $40-50M of FCF ($500 x 102k minus some CapEx and SG&A) per year. For a company to be trading at a market cap of 250M, it is extremely cheap valuations. We just have to wait for the market to start realizing the disconnect.  (My expected cash flow is extremely conservative as I use $1,000 for gold price and $500 for cost of production. The current market price for gold is much higher).

2 responses to “YNG: Hits 102K steady state, on track for 150K”

  1. Im trying to understand this investment, specially the business since its the first mining company im analyzing.

    How do you arrived at $500 cost/ounce? and what capex do you use? D&A proxy to manteinance?


    • I use ’round about’ numbers to come up with the cost and sales price per ounce. The actual cost per management’s presentation is around $465 and spot price is around $1,200, so actual gross profit would be $735/ounce which is much higher than my conservative $500/ounce. As for CapEx, I expect the capital requirements will be minimal in the $1-3M range. The CapEx are already frontloaded as the mine is already equipped and producing. You can get a sense of the operating expenses by looking at the PY 10Ks. I see S&A in the $5-6M range.

Leave a Reply

%d bloggers like this: