The Canada-listed gold mining stocks we’ve dug up have the sector’s greatest financial strength
SmallCapPower | August 12, 2020: Despite yesterday’s big gold price selloff, the current precious metals bull market appears to be intact. Today we have dug down and found three Canada-listed gold mining stocks with the greatest financial strength, based on factors such as profitability, leverage, interest coverage, liquidity, asset volatility, credit risk growth and stability.
*Returns are based on closing stock prices as of August 11, 2020
Seabridge Gold (TSX:SEA) – $23.03
Seabridge Gold’s principal assets are the KSM and Iskut properties located near Stewart, British Columbia, and the Courageous Lake gold project located in Canada’s Northwest Territories. KSM is one of the world’s largest gold projects, with 38.8 million ounces of gold at 0.55 grams per tonne (g/t) plus 10.2 billion pounds of copper at 0.21% Cu. Courageous Lake, meanwhile, contains 6.5 million gold ounces at 2.2 g/t gold. At June 30, 2020, Seabridge Gold’s net working capital was $40.3 million.
- Year-to-Date Return: 28%
Wesdome Gold Mines Ltd. (TSX:WDO) – $12.56
Wesdome Gold Mines explores for, extracts, processes, reclaims, and sells gold in Canada. It produces principally gold in the form of doré bars, and silver as a by-product. WDO boasts over 30 years of continuous gold production and the Company’s principal assets include the Eagle River Mine, which consists of three contiguous mining leases and 442 contiguous active mining claims covering an area of 7,958 hectares; the Mishi Mine that consists of 19 patented mining claims, five mining leases, and five staked claims covering an area of 3,055 hectares; and the Eagle River Mill located near Wawa. During 2019, Wesdome Gold Mines saw a 28% increase in production along with a 9% decrease in cash costs over 2018. With most of its mining infrastructure already built, Wesdome can easily triple production without incurring significant additional capex costs, making the Company an attractive takeover target for a large-cap miner. During Q2, Wesdome generated operating cash flow of $30.2 million and free cash flow of $17.7 million.
- Year-to-Date Return: 24%
Dundee Precious Metals Inc. (TSX:DPM) – $8.90
Dundee Precious Metals is a gold producer operating two gold-copper mines (Chelopech and Krumovgrad) in Bulgaria, and a smelter (Tsumeb) in Namibia. The Company also holds interests in developing gold and exploration properties located in Canada and Serbia, and it has a 10.2% interest in Sabina Gold & Silver Corp., as well as a complex copper concentrate processing facility located in Namibia. During the second quarter of 2020, Dundee Precious Metals generated record free cash flow of US$58.4 million.
- Year-to-Date Return: 62%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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