Cambior Inc
Wednesday, June 28, 2006 at 09:28AM
Gold Prices in Gold Mining Companies
This company is the one of the largest gold miners in Canada, operating 6 mines in North and South America.

In 2005, they managed to produce 638,400 ounces of gold, and their target for this year is 529,000 ounces, which is mostly exposed to the price of gold. This year they intend to spend approximately $29 million in the exploration and development.

One of their new projects is the Camp Caiman development, which is located about 45 kilometres southeast of Cayenne, the capital city of French Guiana; a South American republic of France located on the northeastern coast between Suriname and the Brazilian border. Cambior were granted a concession by the French Government for an area of some 30 kmĀ² valid for a period of 25 years. This advanced project contains 1.2 million ounces of gold contained and is presently awaiting the issuance of permits for anticipated production in late 2007.

This project will play a major part in their efforts to hit a target of 800,000 ounces per year and a reserve base of 8 million ounces.
Having recorded record profits of $20.2 million in 2005 at an average cost of $284, this year the cost of production is estimated to be in the order of $294 per ounce.
To invest in Cambior is to invest in their management team and their ability to explore and mine. Although Cambior used to pay a dividend this will not be possible in the near term due to restrictions placed on the company by its lenders. You are not investing in Cambior for income but for growth.

The company is currently trading at $2.61 and has a Market Capitalisation of $716 million and a P/E ratio of 29. We think it is a good buy at this level and we intend to accumulate more over the summer. By September these prices could be history.

Cambior's shares trade on the Toronto (TSX) and American (AMEX) stock exchanges under the symbol "CBJ". Cambior's warrants, (CBJ.WT.C) and (CBJ.WT.D) trade on the TSX.

28 June 2006

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