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Viewing Stock Pick for CAH
Each week we profile a stock that we believe as a great chance to increase in the medium term (3 - 6mths).
These stocks are chosen by using a mix or our own reseach tools including Directors activity, the Nielsen Supply/Demand Indicator and broker consensus data.
These picks are designed as a starting point for you to investigate further if you wish. Make sure you come back each week to see what we have found.
Symbol / Company
CAH /
Date Picked
01-09-2010
Price When Picked
$1.630
Company Overview
Inside Trader Comments:
Here's a gold stock that is well on its way to 100,000 ounces per annum with 352,000 ounces hedged at over $1500 AUD per ounce. This puts it in a good financial position to know what the future cash flows will be.
The have 2 projects in WA and will be looking for expansion as part of their growth strategy.
6 brokers give it a STRONG BUY recommendation and we're currently seeing demand increase, albeit slightly.
Here is a statement from their website. They must be confident as I've never seen the word 'SAFE' before when talking about resource stocks.
Safe and Successful
'Catalpa will be a safe, significant and successful gold company focusing on delivering rational growth, cash generation and stakeholder rewards'
Even if you don't buy this one now you should ensure you put it in your watch list for any future price retracements.
from their website...
Growing Gold, Growing Value
Catalpa Resources Limited (ASX: CAH) has two exciting gold assets; a 100% interest in the 100, 000 ounces per annum Edna May Gold Project in Western Australia and a 30% interest in the 100, 000 ounces per annum Cracow Gold Project in Queensland (70% Newcrest Mining Limited).
Catalpa’s flagship Edna May Operations boasts an impressive forward sold position of 352,316 ounces of gold at A$1,557.50 per ounce. At a hedge book/spot weighted average gold price of A$1,460 per ounce Catalpa expects to realise an average cash operating margin of A$72 million per annum from the Edna May Gold Project alone.
With a combined Mineral Resource of more than 1.9 million ounces and a combined Ore Reserve of more than one million ounces of gold, the Cracow and Edna May Operations will provide a sustainable long life cash flow to fund Catalpa’s growth strategy.
Catalpa is confident that both Cracow and Edna May offer further Reserve and Resource growth potential, with ongoing exploration programmes at both operations. In parallel, the Company continues to proactively identify and assess other production growth opportunities.
The Company has a motivated and technically accomplished management team and a highly-experienced and supportive Board, committed to realising shareholder value from the Company’s growing asset portfolio.
Catalpa has adopted best practice standards across all its activities, including health and safety, environmental management, corporate governance and
social responsibility.
EDNA MAY OPERATIONS (100%)
Catalpa’s wholly-owned Edna May Gold Project is conveniently positioned just two kilometers from the infrastructure of Westonia, on the eastern edge of WA’s Wheatbelt region. The mine is half way between Perth and Kalgoorlie and ideally situated to be serviced by either of these major mining centres.
With its robust economics, geologically and metallurgically well defined ore-body, high Ore Reserve confidence and excellent recovery rate of more than 92%, Catalpa’s Edna May Gold Project offers an attractive, long-term platform to grow a mid tier gold producer.
Catalpa’s mine and processing schedule demonstrate average gold production at Edna May in excess of 100,000 ounces per annum for a life of mine of more than nine years, with the first gold poured in April 2010.
CRACOW GOLD OPERATIONS (30%)
Catalpa owns 30% of the Cracow Gold project in Queensland with a pre-emptive right over Newcrest’s 70% stake in the asset. The Cracow Gold Project is well managed and operated by Newcrest, allowing Catalpa to remain focused on the ramp up to full production of Edna May Gold project on time and within budget.
The Cracow Gold Project has a history of steady gold production of over 100,000 ounces per annum for the past four years and it is considered to have considerable exploration upside.
Nielsen Indicator Buying Level
1
Weekly Trend Analysis
Uptrend
Daily Trend Analysis
Uptrend
Short Term Support
$1.55
Short Term Resistance
$1.70
Broker Analysis
Num. Analysts in Sample
Recommendation
6
Strong Buy
Director Activity
There has been no recent Director Activity.
Graph
Top Bar - Stock Price
Bottom Bar - Nielsen Indicator
