4 Junior Gold Stocks Trading at an EV/Production Discount

The junior gold stocks we’ve unearthed trade at a discount to 2019 production guidance

SmallCapPower | August 30, 2019: Enterprise Value/Production is a multiple used to evaluate the value of a company as a function of the total ounces of gold produced per day. Today we have excavated four junior gold stocks that trade at a discounted EV/Production multiple. For reference, the stocks were chosen from a list of 38 companies that had an average EV/Production multiple of $535.29/oz.

*Share prices as at close August 27, 2019, data obtained from S&P Capital IQ

Aura Minerals Inc. (TSX: ORA) – $17.30
Metals and Mining

Aura Minerals is a mid-tier gold and copper production company that conducts the operation and development of gold and base metals projects in the Americas. Currently, the Company has 100% interest of, or 100% effective control over, the following mines: 1) The San Andres Gold Mine, an open-pit mine based in the highlands of western Honduras; 2) The Ernesto/Pau-a-Pique Project located in Brazil; 3) The Aranzazu Copper Mine, which is an underground mine in Zacatecas, Mexico; 4) the Sao Francisco Gold Mine, an open-pit heap leach gold mine in Brazil; 5) The Almas Gold project, which is permitted for construction in Brazil; 6) the Matupa Gold Project, which is a gold project based in Brazil that has one deposit and several exploration targets and; 7) The Tolda Fria Gold Project, which is located in Caldas State, Colombia. On August 14, 2019, the Company released its Q2/19 financial results, reporting revenue of $50.4M through the sale of 26,255 ounces of gold.

  • Market Cap: $75.3 Million
  • YTD Return: -9%
  • EV/Production 2019: $167/oz
  • Gold production guidance 2019: 118,000 oz

Orvana Minerals Corp. (TSX: ORV) – $0.31
Metals and Mining

Orvana Minerals is a multi-mine gold-copper-silver producer. The Company’s two properties include: 1) El Valle and Carlés underground mines with their El Valle processing plant located in Asturias, northern Spain; 2) The Don Mario Mine Complex, which is a set of assets that includes the Cerro Felix satellite open pit, Las Tojas ore body, and the previously-mined Lower Mineralized Zone and Upper Mineralized Zone based in southeastern Bolivia. On May 14, 2019, the Company entered into a purchase agreement with Compañía Minera Taguas S.A., to which Orvana agreed to acquire the Taguas property based in Argentina. On August 8, 2019, the Company reported Q3/19 financial results, which showed production of 20,696 ounces of gold and 1.1M pounds of copper. During the quarter, the Company generated revenue of US$31M and EBITDA of US$0.5M.

  • Market Cap: $41.7 Million
  • YTD Return: 116.7%
  • EV/Production 2019: $88/oz
  • Production Guidance 2019: 105,000 oz

Alio Gold Inc. (TSX:  ALO) – $0.99
Metals and Mining

Alio Gold is a gold mining company that focuses on the operation, development and exploration of gold mines. The Company operates two, open-pit heap leach operating mines: 1) the Florida Canyon Mine in Nevada, United States; and 2) the San Francisco Mine in the state of Sonora, Mexico. Additionally, Alio has exploration-stage projects in Mexico and the U.S. On August 8, 2019, the Company reported its Q2/19 results, which showed gold production of 21,483 ounces at all-in-sustaining costs of $1,307/oz.

  • Market Cap: $83.9 Million
  • YTD Return: -14.8%
  • EV/Production 2019: $100/oz
  • Production Guidance 2019: N/A

Caledonia Mining Corporation Plc (TSX: CAL) – $8.70
Metals and Mining

Caledonia Mining Corporation 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 12,712 ounces and a gross profit of $7M.

  • Market Cap: $93.6 Million
  • YTD Return: 26.4%
  • EV/Production 2019: $198/oz
  • Production Guidance 2019: 52,000 oz

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

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