Take physic, pomp

Minefinders (MFN) puts in a poor quarter

Back in April, your humble correspondent called MFN a speculative buy at U$6.94 and put a U$10.97 (+58%) target price on the stock, but also laid out a range of caveats in the NOBS report (that at around 40 of you bought at the time..thank you) that made it clear there was plenty risk involved.

Today the company reported its second quarter and the numbers are not good. Far from the “steady state gold and silver production at model rates” we were promised in the February 2009 company presentation, the cruel reality is a $552 per ounce cash cost, a full $255 higher than that “model rate” they talked about just six months ago. Also included in the report are a range of “it’s not our fault” stuff and excuses that looks petty as a whole that just makes you go humph.

Since that mid-April “spec buy at 7” call the stock went to $9, went back to $7 and then moved back up to the recent $9-and-bits. All in all I’m cool with my original call on the stock but it’s already back down under $9 this morning on the earnings report…quite right, too. All the pretty painting in the press release can’t hide the fact that MFN have over-promised and under-delivered. I’ll be looking in more detail at the stock in this weekend’s IKN Weekly. DYODD, dude.

Disclosure: No position in MFN.

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