The junior gold stocks we’ve unearthed have provided investors with significant year-to-date returns
SmallCapPower | September 24, 2019: Gold prices have been on a continuous upward trend since May 2019. Over that period, the gold price has risen from ~US$1,275/oz to ~$1,550/oz, an increase of nearly 22%, reaching a high that has not been seen since 2013. Over the same period, the VanEck Junior Gold Miner ETF (GDXJ) is up 43%. Gold companies have been prospering from these increased gold prices, with larger players receiving most of the attention. Today we have discovered four junior gold stocks, with market caps between $50M and $1.0B, that have quietly outperformed their peers since the beginning of the year. We looked at both 120-day and year-to-date returns to uncover some of the strongest-performing gold stocks in the junior space.
*Share prices as at September 20, 2019, data obtained from S&P Capital IQ
K92 Mining Inc. (TSXV:KNT) – $1.98
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, which could lead to share-price appreciation. These include a resource expansion to ~5.0M oz/Au and a Preliminary Economic Assessment (PEA) examining a ~ 300,000 oz/Au per year mine.
- Market Cap: $418.7M
- 120-Day Return: +31.9%
- YTD-Return: +148.8%
- 90-Day Average Trading Volume: 677,440
- Consensus Price Target: $3.75
Gran Colombia Gold Corp. (TSX:GCM) – $5.07
Gran Colombia Gold is a Canada-based gold producer with its primary focus in Colombia, where it is currently the largest underground gold and silver producer, with several mines in operation at its Segovia and Marmato Operations. Gran Colombia is continuing to focus on exploration, expansion and modernization activities at its high-grade Segovia Operations. On August 14, GCM released its Q2/19 financial results. These results featured revenue of $74.5M, an increase of <1% from the previous quarter, and EBITDA of $31.9M, a decrease of ~5.9% from the previous quarter. Gran Colombia Gold reported production of 18,700 oz/Au in August, bringing total 2019 production to 155,400 oz/Au. The Company is on track to meet its annual guidance of ~218,000 oz/Au for F2019E.
- Market Cap: $248.5M
- 120-Day Return: +56.6%
- YTD-Return: +89.4%
- 90-Day Average Trading Volume: 228,520
- Consensus Price Target: $6.25
Mandalay Resources Corporation (TSX:MND) – $1.29
Mandalay Resources is an emerging gold producer that operates the Costerfield mine in central Victoria, Australia, and the Björkdal mine in Sweden. The Company also owns the Cerro Bayo mine in the XI Region of southern Chile and the late-stage La Quebrada exploration property located in northern Chile. On August 7, 2019, Mandalay reported Q2/19 financial results: net loss per share was $0.04 on revenue of $26.4M; gold production was ~19,500 oz/Au with cash costs of ~1,130/oz.
- Market Cap: $117.5M
- 120-Day Return: +48.9%
- YTD-Return: +77.3%
- 90-Day Average Trading Volume: 119,340
- Consensus Price Target: $1.50
Leagold Mining Corporation (TSX:LMC) – $2.91
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: $829.0M
- 120-Day Return: +93.4%
- YTD-Return: +69.4%
- 90-Day Average Trading Volume: 671,090
- Consensus Price Target: $3.25
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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