NEW YORK (TheStreet) -- Lake Shore Gold (LSG) shares are up 5.38% to $1.05 on heavy volume in morning trading on Monday after the company announced that it is expanding its drilling operation at the 144 Gap Zone in its Bell Creek mine in Ontario, Canada.
The expansion is a result of the success of its operations at the mine with the company expecting the expanded drilling to add $7 million to the company's exploration expenditures in 2015.
"Success drives growth and that is what we are seeing at both the 144 Gap Zone and Bell Creek. Over the last few years, our business has been focused on stabilizing our operations and achieving our key performance targets, generating cash, reducing debt and building overall financial strength. We have achieved success in all of these areas. We are now in a position to pursue growth, both in terms of building out mine life and pursuing opportunities to grow production," said CEO Tony Makuch.
TheStreet Ratings team rates LAKE SHORE GOLD CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate LAKE SHORE GOLD CORP (LSG) a SELL. This is driven by multiple 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. Among the areas we feel are negative, one of the most important has been weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has decreased to $21.13 million or 44.54% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, LAKE SHORE GOLD CORP has marginally lower results.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 18.4%. Since the same quarter one year prior, revenues fell by 14.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, LAKE SHORE GOLD CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- 49.94% is the gross profit margin for LAKE SHORE GOLD CORP which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -2.67% is in-line with the industry average.
- You can view the full analysis from the report here: LSG Ratings Report