Atna Releases Q3 and Moves Ahead in a Big Way

I had been waiting to post more on Atna until I finished the analysis of Pinson I have been working on, but today Atna released their 3rd quarter results today and they were strong.  I bought some more stock on the results, and I wanted to post a summary of what the quarter was like and why things are looking good for the company.

Atna’s one operating mine, the Briggs mine in Nevada sold 9,700oz of gold.  This was 2,000 oz more than Q2. Production has been increasing steadily for 3 quarters now.

Cash costs as stated on the income statement were stable the last two quarters, albeit still fairly high, at $924/oz of gold sold (Atna calculates costs based on produced gold and also subtracts silver credits so the cash flow number that will come out with the MD&A will vary somewhat from my estimate).

What is most impressive about the quarter is the cash generation of Briggs. The Briggs mine produced $7.4M of operating cash flow.  Below is the corporate cash flow generation of the company.

The cash generation of the company is going to go a long ways to financing the development of Pinson.  Capex spent in the quarter jumped substantially, suggesting that Atna has already moved ahead with starting mine development.

Even with the expenditures the company ended the quarter with a cash position of $10.5M

Atna is in the enviable position of having a stable producing mine that is throwing off enough free cash to fund the development of their star project, Pinson.  I’ll write more about Pinson shortly, but even ignoring that eventual production, the Briggs mine is now producing at a rate of almost 40,000 oz per year.  The company has a market cap of a little over $100M and with debt only $120M (see financial structure below).  A 40,000 oz producer trading at $100M is a reasonable deal in its own right.

If you add Pinson to the mix, not even to mention the potential of a 3rd mine in a few years at Reward, you have the makings of a very cheap stock.   Given the growth prospects of the company, if you believe in a rising or even stable price of gold, you have to like what you see.