Taylor says buy American Bonanza

American Bonanza Gold Corp (C:BZA)
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Thursday August 25 2011 - In the News

Jay Taylor, in the Aug. 17, 2011, edition of Gold, Energy & Tech Stocks, says buy American Bonanza Gold Corp., recently 38 cents. This is the first time he has recommended the stock. American Bonanza expects to start production at its Copperstone gold mine in Arizona in the fourth quarter. Its feasibility study for Copperstone estimates a net present value of $101-million, based on a gold price of $1,400 an ounce and a discount rate of 5 per cent. Mr. Taylor says based on this NPV, the stock is undervalued; American Bonanza's market cap is only $67-million. The newsletter writer also says the past-producing Copperstone is potentially bigger than the feasibility study suggests. The study uses a mill throughput rate of 450 tonnes a day, but the company has increased mill capacity to 700 tonnes a day. Mr. Taylor expects a higher throughput rate will translate to higher production. Currently the company projects gold production between 25,000 ounces and 55,000 ounces a year for the first six years. American Bonanza's president is Brian Kirwin, who was with Placer Dome from 1990 to 1997. After that, he worked at Vengold until 2000. Mr. Taylor says buy this start-up before it becomes a gold producer.