The Canadian gold stocks on our list should be on every bargain hunter’s radar
SmallCapPower | June 26, 2017: An old investing strategy carried out by Benjamin Graham was to purchase shares in companies trading at less than net current asset value, also commonly referred to as working capital. The theory is that you are purchasing the company’s most liquid assets at a discount, so if you were to buy the company and liquidate its assets, you would make a profit. Graham’s strategy has proven to work; however, he suggests creating a diversified portfolio of companies trading below working capital. Today we have identified three such companies, Canadian gold stocks trading at less than net current asset value.
Monument Mining Ltd. (TSXV: MMY) – $0.08
Monument Mining Limited is a gold producer engaged in the operation of gold mines. The Company has over three principal properties totaling approximately 34,000 acres in Pahang State located in the Central Gold Belt District of Peninsular Malaysia. The Company’s exploration and development mineral assets include the Selinsing gold portfolio in Pahang State, Malaysia consisting of the Selinsing, Buffalo Reef, Felda Land and Famehub projects (together Selinsing), and Murchison gold portfolio in Western Australia (WA) consisting of the Burnakura, Tuckanarra and Gabanintha projects, and the Mengapur Polymetallic Project (Mengapur) in Pahang State, Malaysia.
- Market Cap: $24,022,305
- Revenue (LTM): $30,491,818
- Working Capital: $35,397,942
- Discount to Working Capital: 68%
Mangazeya Mining Ltd. (TSXV: MGZ.H) – $0.03
Mangazeya Mining Ltd. is a gold mining company engaged in exploring for precious metals on prospective areas, development of ore. The Company is focused on the subsoil areas in the Russian Federation. The Company holds approximately three licenses through Mangazeya Mining LLC, Dalsvetmet LLC and Koryakmining LLC. Its assets include Savkinskoye Deposit, Nasedkino Deposit and Zolinsko-Arkiinskaya Area. The Savkinskoye Deposit is the core-operating asset of the Company and the gold ore deposit is located in Zabaikalie Territory approximately 400 kilometers to the east of Chita. The Nasedkino gold ore deposit is on the stage of designing a mine to produce over one million tons of ore per year and is located in Mogochinsky District, north-west of Zabaikalie Territory of the Russian Federation.
- Market Cap: $31,963,714
- Revenue (LTM): $45,438,000
- Working Capital: $35,316,000
- Discount to Working Capital: 91%
Minco Gold Corp. (TSXV: MMM) – $0.20
Minco Gold Corporation is engaged in the exploration for minerals. The Company is in the exploration stage. The Company has no producing properties and has no operating revenues. The Company is active in mineral exploration, property evaluation and acquisition in China and focuses on acquiring a portfolio of precious metals properties in areas out of China. The Company’s properties include the Longnan Property and the Gold Bull Mountain Property.
- Market Cap: $10,076,821
- Revenue (LTM): $0.00
- Working Capital: $23,379,930
- Discount to Working Capital: 43%
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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