The Gabelli Gold Fund, Inc. on Hemlo Mining Corp.
Thesis
Hemlo owns the Hemlo Mine in northern Ontario and is redesigning the operation to lower costs and improve throughput. The plan includes shifting from contractors to employees and mining nearer-surface ore so spare mill capacity can be utilized. Exploration for higher-grade ore could further increase production and improve the economics.
“the company hopes to reduce absolute costs and achieve economies of scale.”
Key risks
- Single-asset concentration