5 Junior Miners Trading at a Peer Discount

Low debt levels make the juniors miners on our list worth a look

SmallCapPower | March 8, 2017: Mining has become attractive to investors once again, as bullion prices have rallied over 10% year to date. The Canadian junior miners on our list today are trading at a relative discount to their peers. Regarded as the most important valuation metric in mining, ‘Net Asset Value’ is the net present value (NPV), or discounted cash flow (DCF), value of the mining asset less any debt plus any cash. The Price to NAV multiple shows investors how expensive a stock is compared to its Net Asset Value, and can be compared to its industry peers. Today, we have shortlisted junior miners to include those that are trading at a discount to their peers, with a P/NAV below 0.7x.

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New Gold Inc. (TSX: NGD) – $3.71
Diversified Mining

New Gold Inc. is an intermediate gold mining company engaged in the development and operation of mineral properties. Its segments include New Afton, Mesquite, Peak Mines, Cerro San Pedro, Corporate and Other. It has operating mines in Canada, the United States, Australia and Mexico; development projects in Canada, and a stream on gold production from a development property in Chile. Its development projects include Rainy River and Blackwater projects, which are located in Canada.

  • Market Cap: $1,910.80 million
  • Revenue (LTM): $894.3 million
  • Debt to Equity (FY0): 42.7%
  • Price / Net Assets Value (FY1): 0.67x

Capstone Mining Corp. (TSX: CS) – $1.61
Specialty Mining & Metals

Capstone Mining Corp. is a Canada-based mining company engaged in the production of, and exploration for, base metals in the United States, Mexico, Canada and Chile, with a focus on copper. The Company’s segments include individual mining operations of Pinto Valley (the United States), Cozamin (Mexico), Minto (Canada), Santo Domingo development project (Chile) and other. Its subsidiary, Pinto Valley Mining Corp., owns and operates Pinto Valley Copper Mine located in Arizona. Capstone Gold, S.A. de C.V., its Mexican subsidiary, owns and operates copper-silver Cozamin Mine located in Zacatecas, Mexico. Minto Explorations Ltd., its Canadian subsidiary, owns and operates copper Minto Mine located in Yukon, Canada.

  • Market Cap: $628.7 million
  • Revenue (LTM): $691.2 million
  • Debt to Equity (FY0): 45.9%
  • Price / Net Assets Value (FY1): 0.63x

Primero Mining Corp. (TSX: P) – $0.71

Primero Mining Corp. is a precious metals producer with operations in both Mexico and Canada. The Company is focused on building a portfolio of precious metals assets in the Americas through acquiring, exploring, developing and operating mineral resource properties. Its segments include San Dimas, Cerro del Gallo, Black Fox Complex and Corporate. It owns over two producing properties, including the San Dimas gold-silver mine, located in Mexico’s San Dimas district, and the Black Fox mine, located in the Township of Black River-Matheson, Ontario, Canada.

  • Market Cap: $134.1 million
  • Revenue (LTM): $316.9 million
  • Debt to Equity (FY0): 17.7%
  • Price / Net Assets Value (FY1): 0.27x

Alacer Gold Corp. (TSX: ASR) – $2.34

Alacer Gold Corp. is an intermediate gold mining company engaged in the acquisition, exploration and production of gold in Turkey. The Company has interest in the Copler Gold Mine in Turkey operated by Anagold Madencilik Sanayi ve Ticaret A.S. (Anagold). The Copler Gold Mine is an open-pit, heap-leach operation that produces gold from oxide ore. The Copler orebody also contains refractory sulfide ore. The Copler Mine is located in east-central Turkey in the Erzincan Province, approximately 1,100 kilometers southeast from Istanbul and 550 kilometers east from Ankara, Turkey.

  • Market Cap: $685.1 million
  • Revenue (LTM): $185.8 million
  • Debt to Equity (FY0): 0.0%
  • Price / Net Assets Value (FY1): 0.61x

Timmins Gold Corp. (TSX: TMM) – $0.47

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: $174.7 million
  • Revenue (LTM): $154.6 million
  • Debt to Equity (FY0): 13.2%
  • Price / Net Assets Value (FY1): 0.69x