The junior mining stocks on our list appear to be undervalued relative to their peers
SmallCapPower | January 18, 2018: Today we have identified three junior mining stocks that have high Free Cash Flow yields. This metric is often used to evaluate the profitability of companies in any sector. Free Cash Flow yield is derived from free cash flow per share divided by the current price per share. Unlike regular cash flow, it includes funds used in investing, allowing for a more accurate view of what a company’s real profit margins look like.
Copper Mountain Mining Corp. (TSX:CMMC) – $1.43
Copper
Copper Mountain Mining Corporation is a Canada-based, copper-gold-silver producer focused in British Columbia. The Company’s assets include the Copper Mountain Mine and the Fenton Project. CMMC operates a conventional open pit, truck and shovel operation with an estimated mine life of 16 years. The Company holds a 75% interest in the Copper Mountain mine, as part of a JV with Mitsubishi Materials Corporation (25%). CMMC is guided to produces 80 million lbs of copper, 25-30,000 oz of gold, and 275-325,000 oz of silver in 2018.
- Market Cap: $189.4 Million
- Free Cash Flow: $94,589,000
- Price to Free Cash Flow: 2.0x
- Free Cash Flow Yield (LTM): 31.7%
- Free Cash Flow Yield FY2018: 39.3%
- Peer Average Free Cash Flow Yield FY2018: 3.3%
Taseko Mines Ltd. (TSX:TKO) – $2.39
Copper
Taseko Mines Limited is a mining company operating in Canada and the US. The Company’s flagship asset is the Gibraltar Mine, which is an open pit copper-molybdenum mine located in south-central British Columbia. The mine is expected to produce 140 million lbs of copper and 2.5 million of molybdenum in 2017. The Company also owns the New Prosperity gold-copper, Aley niobium, Florence copper and Harmony gold projects.
- Market Cap: $540.7 Million
- Free Cash Flow: $12,062,000
- Price to Free Cash Flow: 44.8x
- Free Cash Flow Yield (LTM): 28.0%
- Free Cash Flow Yield FY2018: 12.8%
- Peer Average Free Cash Flow Yield FY2018: 3.3%
Premier Gold Mines Ltd. (TSX:PG) – $3.63
Gold
Premier Gold Mines Limited (Premier) is a Canada-based gold producer focused on exploring for and developing gold deposits within North America. Premier holds an interest in the Trans-Canada Property, which includes the Hardrock project and the Brookbank project, the McCoy-Cove Project in Lander County, Nevada, and the South Arturo Mine, in Elko County, Nevada. The Trans-Canada Property is located in northern Ontario, Canada, approximately 200 kilometers northeast of Thunder Bay, and consists of three contiguous blocks comprising over 360 patented mining claims and 676 unpatented mining claims covering an aggregate area of over 29,000 hectares. The Company is expecting to produce between 85-95,000 ounces of gold and 300-325,000 ounces of silver in 2018.
- Market Cap: $734.3 Million
- Free Cash Flow: $155,569,410
- Price to Free Cash Flow: 4.7x
- Free Cash Flow Yield (LTM): 21.1%
- Free Cash Flow Yield FY2018: -17.1%
- Peer Average Free Cash Flow Yield FY2018: 3.3%
Disclosure: Neither the author nor his/her family own shares in any of the companies mentioned above.
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