Hallgarten & Company Initates Coverage on Galane Gold

Hallgarten & Company LLC has initiated coverage on Galane Gold (TSXV:GG), which recently entered a gold prepayment agreement with Samsung Electronics. Christopher Ecclestone, who wrote the report, says, “It is interesting to note that the turnaround of the company has attracted such a big player in the form of Samsung, which is most definitely not a household name in the mining space. This is a massive vote of confidence and investors should expect to see the two acting in concert in the future on a broader scale”.

Some highlights from the report:

… A number of thoughts come to mind on this transaction. Firstly is that it is unprecedented to find a goldminer obtaining an end-user offtaker. We have not heard of any other cases. Secondly, Samsung have clearly done their due diligence before embarking on this arrangement and that in itself is somewhat of a badge of honour for Galane in having passed the test with Samsung. Thirdly, this appears to be an arrangement for the long term that might evolve in various ways, most probably as a “most favoured miner” status for Galane not just with regard to its current operation but also with future transactions.

…At least Galane Gold does not suffer from the ubiquitous syndrome of this day and age which is lack of financing. All the expansions it has planned are very low capex and can be met from either the current cash pile or the cash flow from on-going operations.

…The company does have the advantage that it is NOT one mega mine that is difficult to turn or stop like a super-tanker, thus if gold took a temporary reverse into unprofitable territory, Galane could freeze operations at little expense. Its cash cushion puts it in a very sound position.

Click here to read the full report.