I have to agree. Based on THIS year's anticipated production, NXG is slightly undervalued. Based on 2012, 2013 and 2014 anticipated production, it is greatly undervalued.
NXG is pressing against resistance right now, and the PM environment is not at all good, so I can't call NXG a short-term buy. However, snap it up if it falls to $2.50 or below in the coming weeks.
I'm not planning on selling, btw. NXG *could* surprise me and break through to significant new highs. And it's easier to just "go away" (figuratively) for a little while and coast until summer. Profits will come.
Don't Miss Northgate's Golden Explosion
By Christopher Barker
www.fool.com
May 11, 2011
As a value-oriented investor, navigating selectively through the daunting array of investment options among the miners of gold and silver, I am naturally drawn to a great turnaround story in the making.
As a matter of fact, four of the top five gold or silver stocks that I recommended for 2011 were chosen because I perceived an overblown or over-extended market reaction to operational hiccups that either had been -- or were about to be -- resolved. Just one spot back from Gammon Gold's (NYSE: GRS ) well-deserved pole position, industry veteran Northgate Minerals (AMEX: NXG ) earned this Fool's nod by virtue of a deep value disconnect visible in the shares even as a fresh source of mammoth profitability looms large on the horizon.
Northgate may have splashed water in the face of dozing investors and analysts this week when the company delivered $19.8 million of first-quarter profit during the final period of production from the company's former flagship Kemess South mine. Kemess South went out with a bang, delivering a better-than-expected 14,572 ounces for its final quarter at a terrific net cost of just $85 per ounce. Overall mining costs are expected to remain quite elevated for 2011 at the company's two producing mines in Australia, but I maintain that a near-sighted equity market has focused excessively upon this brief lag in the company's production pipeline -- and therefore failed to adequately consider the miner's 2012 earnings outlook. In any event, Northgate's reiterated 2011 guidance for about 200,000 ounces of gold at a cost between $805 and $845 per ounce is nothing to sneeze at in this high gold price environment.
But the market has not merely sneezed at Northgate's shares; it has coughed and wheezed its way to a sub-$700-million enterprise value for a miner with more than $5.2 billion worth of gold reserves in the ground.
Full article: http://www.fool.com/investing/general/2011/05/11/dont-miss-northgates-golden-explosion.aspx
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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