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NWM Mining Corp (Symbols: NWM on the TSX-V and NWMMF on the OTCBB) www. nwmcorp.ca
The primary focus of NWM is to develop and put into production their Lluvia de Oro and La Jojoba gold mine.
The company share price has retraced from recent highs to the C$0.115 cent level. While this low share price is due mostly to market conditions at the moment, it also is due to the fact the company is about 4 months behind schedule on production.
This is fairly typical in the industry as new mining comes online. There are always issues of different sorts that seem to slow things down from what we hoped. In the case of NWM they are going to be just fine. At the current share price I think this represent good value. Here�s why.
We will produce 4000 ounces of gold in the upcoming third quarter and then 9000 ounces of gold in the fourth quarter of this year. The company will become cash flow positive as of September of 2011. This is where the turning point for the company will start as far as share price goes! In other words the market will re-rate the story.
From there things are going to start happening very quickly. It is expected that the company will commence a 10,000 meter drill program in mid-October with assays coming back as in November and December. This will quickly ramp up our 43-101 numbers for the market especially if things work out as hoped for on the Ridge Zone which could represent some big blue sky potential.
The company has several key exploration targets that look very good for finding additional ore right near the mine. Once we are cash flow positive the company will put this money right back into drilling to build our 43-101 resource numbers. I wouldn�t be surprised to see this mine over 2 million ounces of gold before it is all said and done.
At the mine right now, things are going very well as gold is being poured. Even though the company got behind on the production schedule by several months, they can quickly make up lost ground due to the fact that they were stripping the pit during the delay. This means that instead of loading 7000 tonnes of ore a day on the heap, we will now be able to load 15,000 tonnes a day which will quickly allow them to ramp up their production numbers.
Going into 2012, we expect to produce 42,000 ounces of gold for the year at average cash cost out of the ground of $600 an ounce.
When you combine these numbers with a growing resource calculation, it shouldn�t be difficult to understand that our share price will be significantly higher. I maintain that by early next year, NWM will be trading around the $0.60 cent level and probably be a likely takeover candidate.
NWM is a BUY at current levels.
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