Worth taking a look at the TA and the Fundies.....

Bought a few Norseman Gold this morning. The weakness of the dollar and the rising SP of gold looks like it could help the mining explorers and producers over the autumn to next year.

Think Tom Winnifrith tipped this a few weeks back.


Target first stop 55p and then 60p resistance.

Interesting snippet on SP of gold.....

http://hosted.ap.org/dynamic/stories/U/US_COMMODITIES_REVIEW?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2009-09-03-15-49-16

Up 6.5% ,telephone only dealing at IG index at the moment.....short of stock?.

Some heavy buying in this stock late on today.

Norseman ngl gold mimer starting to look interesting from a TA view on the back of the rising price in gold...

Off to a flying start this morning.

Jim Slater increasing his stake.

Notice that "Mr J D SLATER & FAMILY" now hold 4 pct+

http://www.investegate.co.uk/Article.aspx?id=200909290822548228Z

From Tom Winnifrith who is usually good on miners....

Buy Norseman Gold at 31.5p
Argues Tom Winnifrith of t1ps.com


AIM Listed Norseman Gold has a huge cash pile
It is generting cash at todays gold price and at current production levels.
And is cheap on that basis
But when gold surges so too will Norsemans casflows
And as its output jumps over the coming year, costs will be slashed so boosting cashflows rapidly.
Norseman is a buy at 31.5p and at up to 42p with a one year target of 74p


This is a very simple tale indeed. My colleague Richard Gill spotted this when the shares were just 15p on the Aim & Plus Newsletter and so, with a hat t1p to Atilla, I clamber on board now as the shares are still very cheap. This is a company with a powerful cashed up balance sheet, generating cash, increasing its output so cutting its unit costs with a large proven resource and in the right place at the right time. Norseman (NGL) is a buy at 31.5p and at up to 42p with a one year target of 74p

The Asset
Norseman Gold came to AIM via a complex reverse takeover in April 2007. The details are not relevant. It owns the Norseman Goldmine, which is in Western Australia and is the longest continuously running gold mining operation in the Land of High Culture. Gold was first found on the Norseman field in 1894 and since 1937 it has produced over 5.5 million ounces. Norsemans holdings cover 1,614 square kilometres centred on the Norseman Township where most of its workers live and drink. The area has a superb infrastructure including site-generated power, nearby rail links and airstrip and currently produces from two narrow-vein underground mines the Bullen and the Harlequin.



Since the AIM listing Norseman has made good progress in increasing the JORC compliant resource at the mine. The resource base is now c21 million tonnes at a grade of 5.5 grammes per tonne of gold for 3.7 million ounces There is huge exploration potential within the companys tenements.Norsmans objective at Bullen and Harlequin is to marginally boost production levels it is looking to add a third mine to the Norseman project. Resource drilling programmes are ongoing on three advanced projects North Royal, the OK Mine and Crown Reef with the new mine targeted to be opened during the financial year to June 2010.



Post the RTO Norseman encountered a few technical issues which meant that it missed production targets and its shares duly slumped. But a quarterly report out the other day showed that it is very much on track. The metrics are simple. Norseman has net cash of 17.6 million. In the year to June 30th 2009 it produced c80,000 oz at a cash cost of A$715 oz. But as output levels increased (to 22,000 oz in Q4) cash costs slipped ( to A$636 or US $523) in Q4 although this was partially driven by lower diesel prices. But if a third mine comes onstream Norseman has capacity to treat 700,000 tonnes of rock per annum and so to easily produce 100,000 oz -at that level cash costs would fall to US$500.


. So what is Norseman Worth?
If you are into broker forecasts of earnings per share the house broker is looking for 5.5p in the year to June 30th 2010 and 9p next year. To me this is not relevant.

The worst case scenario for Norseman is that it carries chucking off c80,000 oz per annum at a cash cost of say $550 oz. Gold stays at c $900 and it should generate 11 million of post tax cashflow per annum. In which case on a cashflow multiple of 5 (plus net cash) the shares should be at 42.2p. You will note the size of Norsemans resource & hence long mine life.



But I assume that output will increase to 100,000 oz pretty soon, that cash costs then fall to $500 and it is my belief that gold is heading to well above $1000 per oz. But lets use a $1000 price on that basis the mine will be generating $50 million a year cashflow. Assume a 30% tax rate and shall we call it 22 million. On the same 5 multiple + net cash we derive a 74p price target.



The shares are a buy at 31.5p. The worst case scenario is the 42p limit buying price. My assumptions generate a 74p price target on a one year view. Buy.

Key Data
EPIC: NGL
Market: AIM
Spread: 31p 32p (3.125%)

what date is the above rns GF?? only sp price doesn't tally with todays price. eg 51p cheers BB

gold finger noticed the same when i went to buy the sp .the subscription is 73 for tips com site .
Gold finger presume you have access to tips can you share similar ones .with upward movement never know which tip may be a winner!

Hi chaps.

No not a subscriber to tips but am a member at sharecrazy where all the tips from the t1ps stable can be viewed for free on the front page and usually posted about 5 days after the original tip in order I suppose to further propel the SP further north. All historic tips can be viewed by clicking on the header. Free sign up to that site by the way.

It was one of the daily free tips. It arrived in my inbox on Thurs 20th August.

I'll slap GF's legs when i see him, got me all excited he did. :))

LOL BB...... now this is up to date fresh off the chopping board at hemscott...

Looks pretty good trading on a forward P/E of just a miserly 6.8 to 2010, derd cheap... (one way of valuing the company)

Norseman Gold PLC

FORECASTS
2010 2011
Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Investec Securities
12-10-09 BUY 18.30 7.45 18.77 7.64

Astaire Securities [R]
09-10-09 None 8.25 13.75

2010 2011
Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Consensus 18.30 7.45 0.00 18.77 7.64 0.00
1 Month Change 2.77 1.13 0.00 2.24 0.91 0.00
3 Month Change 18.30 -0.80 0.00 -6.11


GROWTH
2009 (A) 2010 (E) 2011 (E)

Norm. EPS % -30.80% 2.55%
DPS % % %

INVESTMENT RATIOS
2009 (A) 2010 (E) 2011 (E)

EBITDA 14.39m 24.42m 26.89m

EBIT 9.61m m m

Dividend Yield % % %

Dividend Cover x x x

PER 4.71x 6.81x 6.64x

PEG f -0.22f 2.60f

Net Asset Value PS 12.51p p p

Is this a good chance to buy or sell?
52p now.

i wouldn't do anything, but shorting looks the less risky

Looks more like a buy now, cynic.

I think u are right again, cynic...50p now.

Gold is retracing so the Miners will in Unison.

Buy NGL now at 60p. This is seriously undervalued.