4 Gold Mining Stocks Trading at Big Discounts to Cash Flow

The gold mining stocks on our list have industry-low forward Price to Cash Flow per share multiples

SmallCapPower | May 3, 2018: Gold prices decreased from US$1,321/oz to US$1,306/oz this week, shortly after the spike witnessed earlier in April from US$1325/oz to US$1355/oz. With concerns over U.S. military intervention in Syria and other geopolitical conflict, gold prices are likely to follow an upwards trend for much of 2018. The gold mining stocks on our list today all trade at large discounts to forward Price to Cash Flow per share multiples, as compared with their peer average of 5.7x. These stocks could have substantial upside as their cash flows are likely not incorporated into their current share prices.

Avesoro Resources Inc. (TSX:ASO) – $4.70

Avesoro Resources is a Canada-based gold company operating in Liberia and Burkina Faso. The Company’s December 2017, acquisition of Youga and Balogo Gold mines has led to record production this year. The Company’s assets include three mines, which expect to produce 230 koz Au in 2018.

  • Market Cap: $383.3 Million
  • Forward Price to Cash Flow Per Share FY2018: 2.2x
  • YTD Total Return: 56.7%
  • Average Analyst Price Target: N/A

Imperial Metals Corp. (TSX:III) – $1.94

Imperial Metals Corporation is a copper-gold producer operating in British Columbia. The Company’s 2018 production guidance for its Red Chris mine is 72-73M lbs Cu and 31-33 koz Au.

  • Market Cap: $245.2 Million
  • Forward Price to Cash Flow Per Share FY2018: 2.7x
  • YTD Total Return: -42.8%
  • Average Analyst Price Target: $2.60

New Gold Inc. (TSX:NGD) – $3.09

New Gold is a Canada-based gold company operating in North America. The Company expects to produce 560 koz Au in 2018, up from 430 koz Au due to the expansion of production at its Rainy River asset.

  • Market Cap: $1,785.8 Million
  • Forward Price to Cash Flow Per Share FY2018: 3.8x
  • YTD Total Return: -25.2%
  • Average Analyst Price Target: $4.56

Golden Star Resources Ltd. (TSX:GSC) – $0.89

Gold Star Resources is a gold producer with two operating mines in Ghana. The Company expects to produce 240 koz Au in 2018 and has experienced a 12% increase in the Au grade from 3.9 g/t to 4.54 g/t quarter over quarter.

  • Market Cap: $489.7 Million
  • Forward Price to Cash Flow Per Share FY2018: 4.3x
  • YTD Total Return: -19.8%
  • Average Analyst Price Target: $1.78

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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