It was a disappointing performance from NCM yesterday which cost me a steak with one of my colleagues who commented early on the day “NCM always finds a way to go down” to which I replied “steak says it finishes up on the day”, fortunately he doesn’t drink so it will be a cheap and quick lunch! However on a more serious note, following on from yesterday’s comments we believe the market treated NCM’s $3.8bn acquisition of Canadian Pretium’s Brucejack gold mine relatively harshly as it delivers longevity to its production stream with the resource delivering out until at least 2030, at a cost of $US384/oz on last year’s numbers.
Weakness was likely because of new shares being issued to Pretium’s existing holders many of whom will probably take their money and run as an Australian company will be all too hard for some Canadian investors but we believe the dip is a great buying opportunity following what we believe is a solid acquisition – we will be surprised not to see 20% upside over the coming months.
MM is bullish NCM initially looking for a rally towards $30
Add To Hit List
