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« The Best Gold Interview of 2010 | Main | Kinross Gold Corporation: A Takeover Too Far? »
Thursday
Aug192010

High River Gold Mines Limited Update 19th August 2010

HRG Chart 19 August 2010.JPG


Back by popular demand an update of the progress being made by High River Gold Mines Limited (HRG) sporting a nice upward spike in the stock price on heavy volume for HRG, however, the technical indicators have jumped into the overbought zone, at least for now.

Chris Charlwood has very kindly sent us this missive updating us on the current state of play over at High River Gold Mines Limited (HRG) which we hope that you find both interesting and informative.



HRG posted $114M in revenues, $49M in cash flow, $39M in profit and 87k ounces of production for Q2. At $.86/share, HRG is trading at a very low market cap of $722M. With its third party restricted shares (soon to be released), HRG has over $216M in cash and equivalents or $.26/share. Its debt is at $31.5M. Yesterday, Severstal exercised over 40M HRG warrants 3 years before expiry and now holds 70.4%.

Olma Investment Company put a new target price on HRG at $1.93. They get to this target price by discounting the values of Buryatzoloto by 50% and Prognoz by 25%. Hopefully, these discounts will be reduced or eliminated in future once the drill programs are completed in early 2011 for Buryatzoloto and once the Prognoz silver property goes through its bankruptcy procedure (7 month process). The completion of the Bissa (West Africa) feasability study, due at year end, should also help increase the target price with its 1.7M oz potential. 

Gold prices are predicted to increase through the fall and Severstal Gold is rumoured to do an IPO late year - both potentially applying upwards pressure on HRG's share price.
 
Olma Investment Report on HRG Q2
http://freepdfhosting.com/8e9a2e1373.pdf
 
HRG Q2 results
http://finance.yahoo.com/news/High-River-Gold-Reports-ccn-1190209145.html?x=0&.v=1
 
Severstal warrant exercise
http://finance.yahoo.com/news/High-River-Gold-Announces-ccn-2835268665.html?x=0&.v=1
 
HRG Third Party Investments
http://freepdfhosting.com/b89ccdcb84.pdf
 
Chris Charlwood

So there you go.

For what its worth we continue to hold onto our shares in HRG, but as always do the work and make your own investment decisions, after all you are unique.

Stay on your toes volatility will be the order of the day and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

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Reader Comments (1)

What do you think of Yukon-Gold mining? YNGFF
Aloha Steve

August 19, 2010 | Unregistered CommenterSteve

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