4 Junior Mining Stocks Representing Good Relative Value

The Canadian junior mining stocks on our list are trading at low Price/Cash Flow multiples on a relative basis

SmallCapPower | August 4, 2017: Only 11 junior mining companies trading on Canadian stock exchanges have generated positive operating cash flow over the past 12 months. Investing in these cash-flow generating assets is much safer than speculating on junior gold companies that have not yet moved into production. When analyzing these cash-flow positive companies, it is important not to pay too much for an ownership stake. Today we have identified four Canadian junior mining stocks trading below the industry median 8x price/LTM operating cash-flow multiple.

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Taseko Mines Ltd. (TSX: TKO) – $1.90
Specialty Mining & Metals

Taseko Mines Limited is a mining company principally engaged in the production and sale of metals, as well as related activities, including exploration and mine development, within the province of British Columbia, Canada and the State of Arizona, the United States. Its projects represent a range of metals, including gold, copper and niobium. The Company’s operating asset is the Gibraltar Mine, which is a copper-molybdenum mine located in south-central British Columbia. Gibraltar is an open pit copper mine. The Company also owns the New Prosperity gold-copper, Aley niobium, Florence copper and Harmony gold projects.

  • Market Cap: 430,742,269
  • Price/Cash Flow: 2.8x
  • Operating Cash Flow: $155,320,000

Torex Gold Resources Inc. (TSX: TXG) – 21.31

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: $1,704,059,924
  • Price/Cash Flow: 6.6x
  • Operating Cash Flow: $258,733,233

Alio Gold Inc. (TSX: ALO) – $5.13

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: $224,349,039
  • Price/Cash Flow: 4.1x
  • Operating Cash Flow: $54,938,597

Copper Mountain Mining Corp. (TSX: CMMC) – $1.00
Specialty Mining & Metals

Copper Mountain Mining Corporation is a copper-gold producing company engaged in the business of mineral exploration, development and operation of mineral deposits. The Company, through its subsidiary, has interests in the Copper Mountain Mine. The Copper Mountain mine project is situated 20 kilometers south of Princeton, British Columbia, and 300 kilometers east of the port of Vancouver. The Copper Mountain mine project consists of approximately 140 Crown granted mineral claims, over 150 located mineral claims, over 10 mining leases and over 10 properties, covering an area of approximately 70 square kilometers. Its Copper Mountain mine project is a conventional open pit, truck and shovel operation.

  • Market Cap: $132,715,860
  • Price/Cash Flow: 3.2x
  • Operating Cash Flow: $41,503,000

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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