$GGD - Near term target $3.50 (Q1/21) 2020 proved to be quite a turnaround for $GGD financially/operationally and the near term production looks very promising.
At YE19 - cash was low, ops were running at a small deficit, market cap of approx $125m.
At YE20 - cash is U$53m, ops are running at record production, market cap of approx $615m
Silver performed well during 2020 which allows GGD to operate its tailings deposit at positive margins. The Company stated they realised U$6.5m of FCF at a silver price of U$22.71.
Silver price today of $26.40 gives them an additional U$2.2m/qtr of FCF.
Near term catalysts - you could see this at $3.50 by Mar/21:
Los Ricos South PEA - grade profile for OP is 2.26 g/t Gold Equiv, nice operating margin given cutoff originally used $1,400 gold and $16 silver - if recoveries avg 70% combined, the project will provide a nice IRR. If additional tonnage added through drill program, even better for the economics of the project as a whole.
Drilling - one of the largest drill programs in Mexico, the Group sees value in unlocking the Los Ricos region. Positive results from the Northern region of Los Ricos will add more value because of proximity to Southern Region which will have soon to be released economics via a Preliminary Economic Assessment.
Consolidation - better assets are hard to come by, the Group will likely see interest from several larger silver producers. Well performing asset, attractive development asset, clean balance sheet.
Management - the team knows Mexico well, has operated in the capital markets space for over 20 years and have previous success.
Limited downside through 2021, no warrant overhang, management ownership.
