What a freakin' joke dog of a gold miner this thing really is. They can't add up resources properly, they can't mine profitably, they have no idea about labour relations. You are the world's biggest prize patsy if you're still holding this PoS. Here's Reuters, here's the company "it's not our fault" wingeing NR and here's the thing that really matters:
As noted recently here at IKN, Dundee did the right thing by their clients and threw in the towel on Gammon in May after the last round of disappointments. By the looks of the note out of Desjardins this morning, it seems Brian Christie is about to do the right thing, too.
Gammon announces indefinite shutdown of El Cubo operations -- Brian Christie (phone number here) , brian.christie @ (email address here)
Impact: Negative
This morning, Gammon announced that it has indefinitely suspended operations at its El Cubo mine due to the continued labour disruptions and what it calls "untenable financial demands" made by the union workforce. As a result, 397 union workers have been terminated and charges are being filed against union executives.
Management is of the view that the mine has been rendered uneconomic, and that further investments (including its own time) are unwarranted. In discussions with the company, there is little indication of when operations will resume. Some of the non-union contractors from El Cubo will likely be relocated to Ocampo in the near-term.
In our view, this shutdown of the El Cubo operations puts Gammon's 2010 production guidance of 260,000-305,000 gold equivalent ounces at risk, given that it is unclear how long the mine will be non-operational. In our model, we had forecast 25% of Gammon's production coming from El Cubo. This mine constitutes approximately 15% of our US$7.67 NAV, and a three-month loss of production impacts our 2010 adjusted EPS by about US$0.07.
We will shortly be reviewing our 2010 forecast.
That Desjardin's forecast is currently a $10.25 price target, which is nothing short of la-la-land. This emperor has no clothes.