We anticipate that the junior precious metals stocks we’ve dug up will experience strong cash flow per share growth over the next two years
SmallCapPower | August 28, 2019: Price to cash flow is used by investors to measure the value of a stock’s price relative to its operating cash flow per share. Today we have sifted through and found four junior precious metals stocks that are expected to have strong P/CF over the next two years.
*Share prices as at close August 23, 2019, data obtained from S&P Capital IQ
Great Panther Mining Limited (TSX: GPR) – $1.05
Metals and Mining
Great Panther Mining is a precious metals mining and exploration company. Currently, the Company has three wholly-owned mining operations that include: 1) the gold doré Tucano Gold Mine in Amapá State in northern Brazil; 2) the Topia Mine in Durango, Mexico, which produces concentrates containing silver, gold, lead and zinc and; 3) the Guanajuato Mine Complex (GMC) in Guanajuato, Mexico. The GMC includes the Guanajuato Mine, the San Ignacio Mine, and the Cata processing plant, producing silver and gold concentrate. The Company acquired Beadell Resources Limited, a gold mining company listed in Australia, on March 5, 2019. Through this transaction, the Company acquired the Tucano Gold Mine. Additionally, the Company owns the Coricancha Mine Complex in the central Andes of Peru, a gold-silver-copper-lead-zinc mine that has a 600 tonnes per day processing facility. The Company also owns exploration properties, which include: El Horcón, Santa Rosa, and Plomo in Mexico, and Argosy in Canada. On August 8, 2019, the Company closed a US$17.25M bought deal financing at a price of US$0.75 per share.
- Market Cap: $326.7 Million
- YTD Return: 10%
- 90-Day Average Daily Volume (1,000s): 294
- 30-Day Average Daily Volume (1,000s): 387
- P/CF FY2020: 2.4x
- P/CF FY2021: 2.4x
McEwen Mining Inc. (TSX: MUX) – $2.61
Metals and Mining
McEwen Mining engages in the exploration, development, production and sale of gold and silver. Currently, the Company owns: 1) the Gold Bar gold mine in Nevada; 2) the Black Fox gold mine in Ontario, Canada; 3) the El Gallo Project in Sinaloa, Mexico; 4) the Los Azules copper deposit in San Juan, Argentina; 5) the Fenix silver-gold project in Sinaloa, Mexico and a portfolio of exploration properties in Nevada, Canada, Mexico and Argentina. Additionally, the Company owns a 49% interest in Minera Santa Cruz S.A, owner of the producing San José silver-gold mine in Santa Cruz, Argentina, which is operated by the joint venture majority owner, Hochschild Mining plc. On July 25, 2019, the Company announced an updated Grey Fox deposit Indicated resource estimate (up 22%) as well as a new Inferred resource estimate (up 35%) as a result of a new geological and structural interpretation of the 147 Zone.
- Market Cap: $943.8 Million
- YTD Return: 8%
- 90-Day Average Daily Volume (1,000s): 379
- 30-Day Average Daily Volume (1,000s): 454
- P/CF FY2020: 12.4x
- P/CF FY2021: n/a
Royal Nickel Corporation (TSX: RNX) – $0.45
Metals and Mining
The Royal Nickel Corporation is a multi-asset mineral resource company. The two main assets with 100% ownership include: 1) the Beta Hunt Mine, a gold-producing operation in Western Australia; 2) the Higginsville Gold Operations located in Western Australia. Beta Hunt has seen a major high-grade discovery, which includes the Father’s Day Vein discovery in September 2018. The Company completed the acquisition of Higginsville Gold Operations on June 10, 2019, which included a low-cost 1.3 million tonnes per annum gold mill and a substantial portfolio of gold tenements, including the producing Baloo open-pit mine. The Company is planning on integrating these two mines. Additionally, Royal Nickel has a 27.8% interest in the Magneto Investments Limited Partnership, which owns the Dumont Nickel-Cobalt Project, and 24% equity interest in Orford Mining Corporation, which has the Qiqavik and West Raglan exploration projects (gold, nickel) in northern Quebec. On August 21, 2019, the Company announced it produced 7,873 ounces of gold in July 2019.
- Market Cap: $249.1 Million
- YTD Return: -9%
- 90-Day Average Daily Volume (1,000s): 2,766
- 30-Day Average Daily Volume (1,000s): 1,696
- P/CF FY2020: 5.2x
- P/CF FY2021: 4.8x
TMAC Resources Inc. (TSX: TMR) – $5.50
Metals and Mining
TMAC Resources focuses on the exploration, evaluation, development and mining of the Hope Bay mineral property in the Kitikmeot Region of Nunavut, Canada. TMAC has 100% interest in Hope Bay, which consists of three gold deposit trends. The Company announced its Q2/19 financial results on August 14, 2019, which showed gold production of 38,520 ounces. During the quarter, the Company generated gross revenue of $66.1M and had cash costs of US$729 per ounce of gold sold and all-in-sustaining costs of US$1,081 per ounce of gold sold. On August 16, 2019, the Company announced it closed its royalty amendment and private placement with Maverix Metals Inc. and received gross proceeds of US$43M.
- Market Cap: $621.8 Million
- YTD Return: -22%
- 90-Day Average Daily Volume (1,000s): 149
- 30-Day Average Daily Volume (1,000s): 181
- P/CF FY2020: 3.9x
- P/CF FY2021: 3.5x
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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