Mackie Research said it continues to see a long-term value in Alamos Gold (NYSE:AGI), following a weaker than expected year, particularly from Mulatos.
Mackie said it believes Alamos’ cornerstone assets will continue to improve, particularly with the ramp up of Young-Davidson (YD).
Mackie said in a research note that as a result of increased production and better cost control, Mackie expects Alamos’ operating cash flow to increase substantially year over year, and hence view Alamos Gold as a preferred name in the intermediate space.
Alamos has released fourth-quarter operating results, with production of 104.7koz beating Mackie’s 98.2koz forecast due largely to better grades at both Young-Davidson and Mulatos.
As a result, annual production of 380,000 ounces fell within the lower end of guidance, which had previously been set at 375,000-425,000 ounces.
Mackie maintained its ‘buy’ rating on the stock with a $8.00 target price.
Shares of the Toronto, Ontario-based company were trading down 10.4% at $2.76 p.m. in New York on Thursday.