The junior gold stocks we’ve dug up have higher-than-average trading volume and could see increased M&A interest following a blockbuster year for mining deals in 2019
SmallCapPower | December 17, 2019: There has been a lot of M&A in the mining sector this year. Some notable deals include the Barrick Gold and Newmont Mining deal, the Kirkland Lake and Detour Gold deal, and the recently-announced Equinox Gold (TSX:EQX) acquisition of Leagold Mining (TSX:LMC). Consolidation in 2019 has resulted in a total of $30.6 billion in M&A in the gold mining sector. These mergers and acquisitions may be the catalyst to reinvigorate the recently-dormant mining market. Today we have uncovered four junior gold stocks that could have a big year in 2020. The average daily volume of shares traded in the past 30 days is significantly higher than in the past 12 months for some of these companies, possibly due to speculation of additional acquisitions. These companies could offer investors a great opportunity for large returns should consolidation continue in the mining sector in 2020.
*Share price data as at December 13, 2019, data obtained from S&P Capital IQ
K92 Mining Inc. (TSXV:KNT) – $2.60
Mining and Metals
K92 Mining is focused on exploration and development of mineral deposits located in Papua New Guinea. The Company’s main asset is the Kainantu Gold Project, consisting of two gold deposits. The Kainantu property covers a total area of approximately 410 square kilometers and is located in the Eastern Highlands Province of Papua New Guinea. K92 mining trades at a P/NAV multiple of 0.5x, a discount to peers with market caps between $50M and $1.0B, which trade at an average P/NAV multiple of 0.7x. There are a few catalysts over the next six to nine months that could lead to share-price appreciation. These include a resource expansion to ~5.0M oz/Au and a Preliminary Economic Assessment (PEA) suggesting a ~ 300,000 oz/Au per year mine. The Kainantu Gold project has shown high-grade drill results recently, which could make the Company a takeover target.
- Market Cap: $553.9M
- 90-Day Return: +28.6%
- YTD-Return: +204.8%
- 30-Day Average Trading Volume: 1,137,570
- 90-Day Average Trading Volume: 585,620
BTU Metals Corp. (TSXV:BTU) – $0.39
Mining and Metals
BTU Metals is a Canadian junior exploration company that is focused on its Dixie Halo project, which is located in Ontario’s Red Lake district, and attached with Great Bear Resources Ltd.’s (GBR) Dixie project. The Dixie Halo project is made up of four properties that total about 12,963 hectares that surround GBR. In May 2019, GBR reported 16.3m grading 26.9 g/t Au and 7m grading 44.5 g/t Au at the “Hinge Zone” at the Dixie project. The gold incidences of GBR occur along a 2.5km strike that are between 0.5 km and 1.5km of the boundary connecting to Dixie Halo.
- Market Cap: $28.2M
- 90-Day Return: +105.3%
- YTD-Return: +239.1%
- 30-Day Average Trading Volume: 1,444,400
- 90-Day Average Trading Volume: 678,240
Read: BTU Metals is Shaping Up to Be Something Special
Balmoral Resources Ltd (TSX:BAR) – $0.325
Mining and Metals
Balmoral Resources is a junior resource company currently focused on the exploration and development of high-grade gold and base metals assets in major Canadian mining districts. The Company holds interests in each of the Fenelon, N2, and Martiniere Properties. The Fenelon Property is centrally located within the Company’s Detour Trend Project, over 65 kilometers east of the Detour Gold Deposit. The N2 Property is strategically located along the gold-bearing Casa Berardi Deformation Zone immediately east of the former-producing Vezza gold deposit in northern Quebec. The Martiniere Property is centrally located within the Company’s Detour Trend Project, over 45 kilometers east of the Detour Gold Deposit located in northeastern Ontario. BAR also holds an interest in the Northshore property in Ontario along with various surface rights attached to the property, located along the southern margin of the Hemlo-Schreiber greenstone belt. Balmoral announced recently a strategic investment from Eric Sprott, which has led to a +40% rally in the Company’s share price over the past month. Its proximity to the Detour Gold project recently acquired and its strategic investment from Eric Sprott could make the Company a potential acquisition target.
- Market Cap: $54.9M
- 90-Day Return: +47.8%
- YTD-Return: +151.9%
- 30-Day Average Trading Volume: 757,840
- 90-Day Average Trading Volume: 360,890
Teranga Gold Corporation (TSX:TGZ) – $6.01
Mining and Metals
Teranga Gold is a Canada-based mining company engaged in the production, sale and exploration of gold in Senegal, West Africa. The Company owns and operates a gold mine and mill, the Sabodala Gold mine, in Senegal, West Africa. The Company is focused on the exploration and development of Sabodala gold mine, which is located approximately 650 kilometers southeast of Dakar, the capital of Senegal. The Sabodala mine license covers an area of approximately 290 square kilometers.
- Market Cap: $646.6M
- 90-Day Return: +14.1%
- YTD-Return: +50.4%
- 30-Day Average Trading Volume: 522,970
- 90-Day Average Trading Volume: 348,760
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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