Brigus Gold is engaged in gold mining, exploration and development, including the extraction, processing and related activities. The company also owns an open pit and an underground mine, Black Fox, in Ontario, Canada. The three analysts covering the stock recommend a buy rating with the average consensus estimate indicating a potential upside of 77.5% in the upcoming few months. The stock was trading at $1.63 Friday morning.
The company's recently reported third-quarter results that were the best quarter for overall operating performance since production started at Black Fox in May 2009. Looking ahead into the fourth quarter, production is seen ranging between 16,000 and 19,000 ounces, primarily because of reduced pit production. For 2010, the company expects cash costs to remain relatively unchanged from the 2009 levels, between $550 and $600 per ounce.
Going ahead, Brigus is expected to raise its underground production target from 800 tonnes per day to 1,100 tonnes per day by the end of 2011. Meanwhile, ores from the underground portion of Black Fox mine are expected to be shipped to the mill in early 2011. Brigus sees production to range between 102,000 and 112,000 ounces of gold at a total capital expenditure of $26 million. Meanwhile, it is also seeking to develop the Goldfield project into a producing gold mine within the current development schedule, as early as 2013. The conversion process should be completed by June 2011, and should augment production by more than 70,000 ounces in the first year.Effective January 2011, the company has announced plans to eliminate 100% of its forward gold sales contract obligations, thereby benefiting from the sale of its Black Fox Mine gold production at spot prices in the future.
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