Sector valuations are still low despite a rebound in the gold price, making these companies potential takeover targets
SmallCapPower | April 28, 2016: Signs so far are pointing to a good year for gold stocks in 2016. Despite the recent rally, though, valuations remain low, especially on an enterprise value (EV) to gold ounces in the ground basis. Using that criteria, we’ve identified three stocks that are being valued at $100 an ounce, which could make the companies possible acquisition candidates.
NovaGold Resources Inc. (TSE:NG)
NovaGold Resources is engaged in the exploration and development of gold and copper mineral properties. The Company’s principal assets include a 50% interest in the Donlin Gold project in Alaska, and a 50% interest in the Galore Creek project in British Columbia, Canada.
Market Cap: $1,918 million
EV/gold ounce: $63
IAMGOLD Corp (TSE:IMG)
IAMGOLD Corporation is engaged in the exploration, development and production of mineral resource properties across the world, as well as holding various royalty interests on mineral resource properties. The Company’s mining activities in Canada include Doyon Division with Westwood Mine in Quebec and Cote Gold Project development project in Ontario. Its mining activities in Africa include Burkina Faso- Essakane mine and Mali – Sadiola Mine, and in South America include Suriname – Rosebel Mine.
Market Cap: $1,234 million
EV/gold ounce: $72
Eldorado Gold Corp (TSE:EDL)
Eldorado Gold Corp’s activities involve various facets of the mining industry, including exploration, development, production and reclamation. Its operating gold mines include Kisladag in Turkey (100%), Efemcukuru in Turkey (100%), Tanjianshan in China (90%), White Mountain in China (95%) and Jinfeng in China (82%). Its gold projects include Perama Hill in Greece (100%), Olympias in Greece (95%), Skouries in Greece (95%), Certej in Romania (81%), Eastern Dragon in China (75%) and Tocantinzinho in Brazil (100%). Its other operating mines include Stratoni Lead and Zinc Concentrates in Greece (95%) and Vila Nova Iron Ore in Brazil (100%).
Market Cap: $2,775 million
EV/gold ounce: $80