The TSX-listed junior gold stocks we’ve uncovered have had notable volume and price momentum lately
SmallCapPower | September 9, 2019: On September 4, 2019, the gold price hit a multi-year high of US$1,561/oz, as protests in Hong Kong, additional tariffs on Chinese/U.S. goods from both nations, and the flattening yield curve drove investors into defensive assets. It appears that investors are fleeing from riskier assets, such as bonds and stocks and buying gold, which is viewed by investors as a AAA zero-coupon bond and is a safe-haven in times of political and economic uncertainty. Gold companies have been prospering from these increased gold prices, with larger players receiving most of the attention. Today we have discovered four TSX-listed junior gold stocks that have experienced large increases in price and volume momentum. Price and volume momentum are a good indicator of bullishness, as increased share prices on greater volumes show heightened investor interest in a stock.
*Share prices as at September 5, 2019, data obtained from S&P Capital IQ
Dundee Precious Metals Inc. (TSX: DPM) – $5.36
Dundee Precious Metals is a gold producer operating two gold-copper mines (Chelopech and Krumovgrad) in Bulgaria, and a smelter (Tsumeb) in Namibia. The Company also holds interests in developing gold and exploration properties located in Canada and Serbia, and it has a 10.5% interest in Sabina Gold & Silver Corp., as well as a complex copper concentrate processing facility located in Namibia. On July 30, 2019, the Company announced its Q2/19 financial results – total production for the second quarter was 52.5K oz/Au and 9M lbs/Cu. Financial results were also highlighted by revenue of $99.2M and free cash flow of $24.4M.
- Market Cap: $960.7M
- 30-Day Return: 9.4%
- 90-Day Return: 25.8%
- 30-Day Average Trading Volume: 435,000
- 90-Day Average Trading Volume: 391,000
Roxgold Inc. (TSX: ROXG) – $1.32
Roxgold is a gold producer operating in Burkina Faso. The Company’s flagship asset, the Yaramoko project, began commercial production in October 2016. Yaramoko is an underground gold mine located in southwest Burkina Faso, the only underground gold mine in the country. The mine hosts mineral reserves of 1.8 million tonnes grading 11.47g/t Au for a total 662,000 oz. The mine produces an average of 125k oz per year. On August 13, 2019, Roxgold released Q2/19 financial results. During the quarter, Roxgold produced 34.4K oz/Au, a 4% decrease from Q1 (35.8K oz/Au produced). The lower average head grade was due primarily to the ramp-up of the Bagassi South underground mine, which delivered lower grade development ore during the quarter. Q2/19 results were also highlighted by revenue of $39.7M (was $45.M in Q2/18) and free cash flow of $21.8M, or $0.06/share. Management has provided 2019E guidance, with gold production expected to be between 145K and 155k oz, with cash and all-in-sustaining costs between $440-$470/oz and $765-$795/oz.
- Market Cap: $489.3M
- 30-Day Return: 13.8%
- 90-Day Return: 28.2%
- 30-Day Average Trading Volume: 2,167,000
- 90-Day Average Trading Volume: 1,554,000
Caledonia Mining Corporation Plc (TSX: CAL) – $9.25
Caledonia Mining focuses on exploration, development and mining in Zimbabwe. The Company’s main asset is a 49% legal ownership of the Blanket Mine, an operating gold mine in Zimbabwe. In accordance with the signing of an agreement announced on November 6, 2018, the Company is planning to purchase an additional 15% of the Blanket Mine from one of the mine’s indigenous shareholders. On August 13, 2019, the Company announced financial results for Q2/19, which showed gold production of 12.7K oz/Au (an increase of 0.5% from Q2/18) and a gross profit of $7M. Cash cost and all-in-sustaining costs were $534/oz and $656/oz, respectively, a 25.5% and 23.4% decrease from Q2/18. The costs were reduced due primarily to lower electricity costs, the devaluation of the Zimbabwe currency, lower administrative expenses and sustaining capital expenditures.
- Market Cap: $99.6M
- 30-Day Return: 15.6%
- 90-Day Return: 27.2%
- 30-Day Average Trading Volume: 5,000
- 90-Day Average Trading Volume: 3,000
Leagold Mining Corporation (TSX: LMC) – $2.79
Leagold is a mid-tier gold producer with a focus on high-yield targets in Latin America. Currently, the Company owns four active mines. Its flagship project, Los Filos, is located 240km south of Mexico City, Mexico, while the remaining three mining projects are concentrated in Brazil. Current consolidated guidance is estimated at 380K-420K oz/Au production in 2019. In June 2019, Leagold completed a $400M debt financing ($200m credit revolver and $200M short-term loan). With long-term funding in place, the Company plans to launch a development plan that positions Leagold to become a 600K-700K oz/Au annual producer.
- Market Cap: $794.8M
- 30-Day Return: 22.4%
- 90-Day Return: 80.0%
- 30-Day Average Trading Volume: 984,000
- 90-Day Average Trading Volume: 712,000
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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