NEW YORK (TheStreet) -- Shares of AuRico Gold (AUQ) were gaining 3% to $3.40 Monday after the gold miner announced the discovery of a new gold-copper porphyry at Kemess East near the Kemess mill facility in British Columbia.
"The Kemess East exploration program has identified a significant new gold-copper porphyry mineralized system that is higher grade than the Kemess Underground and is located in immediate proximity to the existing processing facility and associated surface infrastructure that includes a 50,000 tonne per day mill facility, administration and camp facilities, permitted tailings storage and full access to grid power," AuRico Gold president and CEO Scott Perry said in a statement.
The Toronto-based company plans to have an initial resource estimate for Kemess East in early 2015. The initial mineralogical assessment indicated that Kemess East is similar to the Kemess Underground deposit.
TheStreet Ratings team rates AURICO GOLD INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate AURICO GOLD INC (AUQ) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AURICO GOLD INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, AURICO GOLD INC reported poor results of -$0.77 versus -$0.44 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 205.8% when compared to the same quarter one year ago, falling from $14.86 million to -$15.72 million.
- Net operating cash flow has significantly decreased to $2.79 million or 88.54% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of AURICO GOLD INC has not done very well: it is down 11.47% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, AURICO GOLD INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: AUQ Ratings Report