The Canadian junior gold stocks on our list offer the best protection against a declining gold price
SmallCapPower | July 20, 2017: Today we have identified five Canadian junior gold stocks with leading operating margins. All the companies on our list have operating margins over 19%. Investing in these stocks gives you good protection against a falling gold price. Falling gold prices lead to revenue declines for the entire industry, so companies with lower margins can become unprofitable, whereas high margin companies have a nice cushion in which to rely.
Torex Gold Resources Inc. (TSX: TXG) – $22.40
Gold
Torex Gold Resources Inc. is a Canada-based resource company that operates through the segment of mineral exploration and mine development and operation in Mexico. The Company is engaged in the exploration, development and operation of the Morelos Gold Property. The Morelos Gold Property is located in the Guerrero Gold Belt in southern Mexico, approximately 180 kilometers to the southwest of Mexico City and 50 kilometers southwest of Iguala. The Morelos Gold Property consists of approximately seven mineral concessions covering a total area of approximately 29,000 hectares. Its principal assets are the El Limon Guajes (ELG) mine (the ELG Mine) and the Media Luna project (the Media Luna Project).
- Market Cap: $1,777,091,169
- Operating Income: $135,382,458
- Operating Margin: 32%
Semafo Inc. (TSX: SMF) – $3.05
Gold
SEMAFO Inc. is a Canada-based mining company. Its segments include Mana, Burkina Faso; Natougou, Burkina Faso, and Other exploration. The Company, through its subsidiaries, is engaged in gold mining activities, including exploration, development and operations. Its properties include Mana project, which is located in Burkina Faso that includes the satellite Siou and Fofina deposits; Natougou advanced gold deposit, which is located approximately 320 kilometers east of Ouagadougou, and consists of a drill database of over 170 diamond, 625 multi-purpose (reverse-circulation (RC) pre-collar and core tail) and 550 RC drill holes; Banfora project, which is located approximately 200 kilometers south west of Mana, and Nabanga project, which is located approximately 250 kilometers south-east of Ouagadougou.
- Market Cap: $985,479,235
- Operating Income: $80,695,498
- Operating Margin: 30%
Centerra Gold Inc. (TSX: CG) – $6.78
Gold
Centerra Gold Inc. is a Canada-based gold mining company focused on operating, developing, exploring and acquiring gold properties in Asia, North America and other markets across the world. The Company’s exploration segment includes the operations of Lagares Project in which the activities are related to its subsidiary, Centerra Gold (KB) Inc. Its Kyrgyz segment includes Kumtor Gold Co. (KGC) (Kyrgyz Republic), which operates Kumtor Mine. Its Mongolian segment includes Centerra Gold Mongolia LLC (CGM) (Mongolia), which operates ATO Project and Gatsuurt Project, and Boroo Gold LLC (BGC) (Mongolia), which operates Boroo Mine. Its Turkish segment includes Centerra Luxembourg Holdings S.ar.L (Luxembourg), Centerra Exploration B.V. (CEBV) (The Netherlands), and Oksut Madencilik Sanayi Ve Tkaret A.S. (Turkey), which operates Oksut Project.
- Market Cap: $1,974,886,577
- Operating Income: $224,352,179
- Operating Margin: 22%
Teranga Gold Corp. (TSX: TGZ) – $3.40
Gold
Teranga Gold Corp is a Canada-based mining company engaged in the production, sale and exploration of gold in Senegal, West Africa. The Company owns and operates a gold mine and mill, the Sabodala Gold mine, in Senegal, West Africa. The Company is focused on the exploration and development of Sabodala gold mine, which is located approximately 650 kilometers southeast of Dakar, the capital of Senegal.
- Market Cap: $362,991,145
- Operating Income: $69,004,683
- Operating Margin: 19%
Alio Gold Inc. (TSX: ALO) – $6.02
Gold
Alio Gold Inc, formerly Timmins Gold Corp, is a Canada-based gold producer engaged in the operation, development, exploration and acquisition of resource properties in Mexico through its subsidiaries, Timmins Goldcorp Mexico, S.A. de C.V. and Molimentales del Noroeste, S.A. de C.V. (MdN). MdN owns the San Francisco Mine in Sonora, Mexico. MdN also owns the Caballo Blanco Property, an exploration and evaluation asset in Veracruz, Mexico. The Company also holds the Ana Paula gold project, which is an advanced stage development project in the Guerrero Gold Belt.
- Market Cap: $214,088,417
- Operating Income: $50,169,108
- Operating Margin: 30%
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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