Rio Alto Mining Ltd (NYSE:RIOM) Continues To Remain Undervalued


Rio Alto Mining Ltd (NYSE:RIOM) was down by close to 11 percent during trading on 17th March on the back of continued investor confidence in the stock. This underlying weakness in the stock can be traced back to its 2014 Cost and Production Guidance which it had released in the first week of February. Since then, the stock has posted a 14.6 percent decrease in its market value.

2014 Outlook Highlights

The highlights of the guidance for the 2014 operations were as follows. The mining firm was foreseeing production from the current full year operations to come in around 190,000 to 210,000 ounces of gold. It anticipates costs of operations to extract and process gold to come in between $629 to $695 per ounce of gold sold.  Over all costs of operations per ounce of gold has been pegged between $990 and $1094 per ounce for the full year. The above projection had been based by the firm on an estimation that its gold recovery would come in at 87 percent with its throughput ore extraction coming in at 32,000 tons per day.

2014 Cap Ex Plans

Rio Alto Mining Ltd (NYSE:RIOM) has also indicated that it would be looking beyond 2014 operations in order to secure investor returns beyond the short range. It has indicated that it would be having a fair estimation of resources available at its La Arena mining property by March first week and would be able to provide a updated estimation of its reserves.

The firm also disclosed the capital expenditure outlook it had set aside for the current year. It hopes to set aside $35.4 million totally for these infrastructure expansion projects. These include $20.8 million which would be spent on pad construction and $2.2 million on acid water treatment and an additional $4 million on waste dump treatment and dumping locations.


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