Sunday, December 30, 2012
Imperial Metals (IPMLF) Is Not The Miner For Me
Imperial Metals (IPMLF / III.TO) has two operating mines and several developmental and exploration properties. I'd prefer to analyze them using value investing criteria since they are not a startup mining company, but some details of their properties deserve mention.
Their Mount Polly mine is operating but its 2P reserves are very low grade. I'd say the same for their Huckleberry mine. The MII resource grade at their Red Chris developmental project is similarly unimpressive. What are their cash costs of production? I have no idea, but I wonder whether these projects would be worth doing if the price of gold were half of what it is today. The Sterling project, however, has a very impressive 7.41 g/t Au, so here's hoping they get it started. It's too early to tell whether their three exploration properties will pan out.
Imperial is earning positive net income but their five-year EPS growth is negative and their five-year ROE is below the mining sector's average. Those are reasons enough for me not to own this stock, besides the low ore grades for their active mines.
Full disclosure: No position in Imperial Metals at this time.