The Motley Fool

Why Guyana Goldfields Shares Gained

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of Guyana Goldfields (TSX: GUY) popped 11% today after the gold miner’s board approved a $238 million expenditure for the Aurora Gold Project to reach commercial production.

So what: The stock has slumped in 2013 on depressed gold prices, but today’s news is reigniting optimism over Guyana’s growth prospects going forward. In fact, management expects the Aurora project to generate peak-year (2021) cash flow of about $250 million even if gold prices stayed relatively flat.

Now what: The expenditure is contingent upon project financing and other approvals, which is expected to be completed by Q2 2014. “This is an extremely significant milestone for the Project and for the Company,” said President and CEO Scott Caldwell. “We are excited to be moving the Aurora Gold Project forward and have engaged an excellent team whose strengths complement each other.” So while Guyana Goldfields remains just too speculative for average investors, its seemingly bolstered production prospects, coupled with the stock’s still-beaten down price (off about 60% from its 52-week highs), make it an intriguing opportunity for resource-savvy Fools.

Looking for another resource other than gold that's been beaten down but could be set for a massive rebound?  Check out our special FREE report “Fuel Your Portfolio With This Energetic Commodity”. In this report, you’ll find that Canada is rich in another energy source that is poised to take off! Click here now to get the full story!

Fool contributor Brian Pacampara does not own a position in any of the companies mentioned.  The Motley Fool does not own a position in any of the companies mentioned.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.