The small cap Canadian gold stocks we’ve dug up have realized free cash flow yields well above the industry average in their latest quarter
SmallCapPower | June 27, 2019: The U.S. Federal Reserve hinted at future cuts in the Federal funds interest rate after its FOMC meeting on June 19, 2019. As a result the S&P 500 rallied, hitting a new intraday high. With this news of lower interest rates, investors have started to look for returns from different assets, which has led to gold increasing by 2.7%. On June 20, 2019, the spot gold price hit ~US1,385/oz, which is the highest it has been in the five years since March 17, 2014, at ~US$1,386/oz. Gold prices have increased $80/oz so far in the month of June. Today we have uncovered four Canadian gold stocks trading on the TSX that have realized free cash flow yields well above the average of their peers in their latest quarter. For reference, the average free cash flow yield for these companies in their latest quarter was -29%.
Share prices as at close Tuesday, June 25, 2019, data obtained from S&P Capital IQ
Detour Gold Corporation (TSX:DGC) – $15.96
Detour Gold owns and operates the Detour Lake mine, a large-scale, open-pit operation in northern Ontario. Detour Lake is one of the largest gold-producing mines in Canada, with production exceeding 600,000 ounces per year and mineral reserves of 15.4M ounces of gold. The Company puts on emphasis on responsible mining, environmental stewardship, and commitment to the communities in which they operate.
- Market Cap: $2.8B
- YTD Return: 35.2%
- Average 90 Day Trading Volume: 780,000
- Free Cash Flow Yield: 22%
- All in Cash Cost per ounce sold in latest quarter: $739
Centerra Gold Inc (TSX:CG) – $9.33
Headquartered in Toronto, Ontario, Centerra Gold is a Canada-based gold mining company engaged in the operation, exploration, development, and acquisition of gold properties globally. Its flagship projects include the 100% owned Kumtor gold mine located in the Kyrgyz Republic, and the Mount Milligan gold-copper mine located in British Columbia, Canada. On June 18, Centerra Gold announced that it will host a conference call and webcast of its 2019 second-quarter financial and operating results at 8am (EST) on Wednesday, July 31, 2019. The results are scheduled to be released after the market closes on Tuesday, July 30.
- Market Cap: $2.7B
- YTD Return: 54.8%
- Average 90 Day Trading Volume: 560,000
- Free Cash Flow Yield: 16.2%
- All in Cash Cost per ounce sold in latest quarter: $696
Pretium Resources Inc. (TSX:PVG) – $13.26
Pretium Resources is a Vancouver-based gold company that owns the producing Brucejack gold project in British Columbia, 65km north of the town of Stewart. The Brucejack project hosts 6.4 Moz of P&P gold reserves with an average grade of 12.6 g/t Au. The mine entered into commercial production in July 2017 and achieved steady state production in Q2/18. On June 5, Pretium Resources Inc reported that its 2019 deep underground exploration drilling program met mineralization expectations, with 5.56 grams per tonne of gold intersected over 107.45 meters.
- Market Cap: $2.4B
- YTD Return: 17.7%
- Average 90 Day Trading Volume: 540,000
- Free Cash Flow Yield: 19.8%
- All in Cash Cost per ounce sold in latest quarter: $686
Alacer Gold Corporation (TSX:ASR) – $4.54
Based in Denver, Colorado, Alacer Gold is a gold producer with an 80% interest in the world-class Çöpler Gold Mine. The mine is in east-central Turkey in the Erzincan Province, approximately 1,100 kilometers southeast from Istanbul and 500km east from Ankara, Turkey’s capital city. On June 13, Alacer Gold Corporation announced that commercial production has been achieved at its Çöpler sulfide plant, effective May 31, 2019. During May, the sulfide plant operated at design for the sulfide sulfur processed and averaged a throughput rate of over 80%.
- Market Cap: $1.3B
- YTD Return: 77.4%
- Average 90 Day Trading Volume: 780,000
- Free Cash Flow Yield: 31%
- All in Cash Cost per ounce sold in latest quarter: $511
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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