Last Updated : 18 November 2009 at 10:55 IST

Invest and make money from Yamaha Gold

SHARE THIS STORY

LONDON (Commodity Online): Is it worth buying Yamaha (NYSE:AUY)? SmarTrend, a proprietary pattern recognition system, called an uptrend for Yamana Gold on November 06, 2009 at $11.96. Since then, Yamana Gold has returned 10.1% as of today's recent price of $13.17.

SmarTrend called an Uptrend for Yamana Gold (NYSE:AUY) on July 20, 2009 at $9.74. Since then, Yamana Gold has returned 24.7% as of today's recent price of $12.15.

Following is an analysis on Yamaha Gold, published in Commodity Online sometime back:

Even as analysts have been predicting a rash of takeovers within the gold sector, as strong gold prices have helped larger miners raise funds, there are some biggies who are actually shutting the door and bolting it. Like Yamana Gold which has actually cut back on its assets, a concept that runs counter to the general thinking in the gold sector that more is better.

For the junior players, their slow number continues to play, given that the aftershocks of last year’s resource selloff and tight credit markets have kept valuations very low.

Rather than add projects, the Toronto-based company agreed in June to sell three of its higher-cost mines in Brazil and Honduras to exploration company Aura Minerals for about $200-million to focus instead mining and discovering more “high-quality”, low-cost ounces at its other properties spread throughout Latin America.

Chief executive Peter Marrone, who built the company into a mid-tier player through a series of takeovers in 2006 and 2007, has shut the door on further acquisitions, saying the company’s current assets are more attractive than anything on the market.”It is not part of our strategic plan,” Marrone said. “We’ve outlined what the growth plan of the company is and we’re going to continue with that growth plan. It is completely organic.”

The company has also backed away from its past prediction of reaching 2 million ounces of annual production by 2012, a boast that used to be standard in its news releases. Indeed, its outlook seems a lot more modest now, with expected output of about 1.2 million ounces this year, down from previous forecasts of 1.3 million to 1.4 million.