Market update: Gold has broken out to all time highs, in most currencies except the dollar. And now we have Trump escalating a trade war with China! https://revealingfraud.com/2019/08/silver-gold/trumps-trade-war-with-china/ Trade wars collapse business and contract the economy, cause inflation, and a rising gold price.
I’m now using $1500 for the gold price in my leverage calculations. The gold price may well run to break out over $1950 USD to all time highs in the USD as well. The world produces about 80-90 million ounces of gold, with US investors buying only about 2 million ounces. US investors do not yet drive the gold price, and when it begins to, I think the gold price will run far higher than $2000/oz.
If you find this information useful, please consider buying my stock picks of the companies that profile favorably towards the bottom of this list. Back in 2006, when the silver market was hot, I would get up to 50 new paying subscribers in a day. This month, I’ve gotten less than 10, barely enough to cover the cost to send out these emails. I think this disinterest among investors is a sign of a “market bottom” in gold stocks, and is bound to turn around fast.
Explanation and Disclaimers: The list of stocks is sorted by the leverage calculation, from lowest to highest. The Leverage calculation is the total value of the gold resources divided by the market cap. It’s one measure of what you get compared to what you are paying. You tend to get more of what you are paying for, with a higher Leverage calculation.
The market cap (MC) is the shares issued and outstanding, multipled by the share price in USD. It is a value of the company. I am not calculating based on warrants and options issued which is called the fully diluted share number.
The Leverage calculation is only a preliminary way to value a gold exploration company. Ultimately, profits tend to drive stock prices.
The Leverage calculation does not take into account whether the resources are economic to mine or not. Nor does it take into account the Capex, which is the cost to build a mine. Resources are generally determined to be economic at the point of a full feasibility study, at which point “measured and indicated” resources are upgraded into “proven and probable” resources. Higher grade resources tend to be more likely to be economic, but not always. “g/t” stands for “grams per metric tonne”, also known as parts per million.
Where applicable, I have taken Capex (the cost to build the mine) into account, adding it to the Market cap, which falsely assumes a company will raise 100% of the Capex by issuing shares at the current price. In reality, there are three major ways to finance: 1. a Joint Venture with a Major or being acquired by a Major, 2. debt financing which can include locking in a gold price or hedging, and 3. issuing stock. Stock being issued usually accounts for about half of financing, and often takes place at 80% of the current share price. Each method of financing has benefits and drawbacks, and I don’t control what a company does, so don’t yell at me about this.
Some stocks have no capex, because they are already producing. That’s great! Others have no capex, because they have not calculated one with a feasibility study yet, that’s bad. Some have a low capex, good, some have a high capex, bad.
Other methods to value gold companies are based on the cost of production, the number of gold ounces produced, current or forward P/E ratios, the life of the mine, actual realized profits, etc.
Mining may suffer from many difficulties: In ground resources may have been overestimated. The gold price can drop. The gold price can go up and cause hedging losses if a company pre sold gold ounces to finance the mine. There can be worker strikes, nationalizations, revolutions, revolt, war. There can be natural disasters, man made disasters, mine cave ins, pit wall collapses.
What is “pump and dump”? https://www.sec.gov/fast-answers/answerspumpdumphtm.html Warning, do not defame me by falsely accusing me of pump and dump, as such could expose you to a defamation for libel and slander lawsuit. Pump and dump consists of lies, as the SEC warns ““Pump-and-dump” schemes involve the touting of a company’s stock (typically small, so-called “microcap” companies) through false and misleading statements to the marketplace.” In contrast, I’ve done what I can to verify that all this information is true and correct to the best of my ability, including providing the links to company pages where you can verify the information. I can not guarantee that the company is not lying to us all.
These calculations are reasonably accurate as of 8-24-2019. Gold Price? $1525/oz. Many things may change these valuations. Stock prices may have already moved. Companies can issue more shares. Companies may find more resources. Companies may get acquired, and default on promises. The gold price may change. I may have made errors. Therefore, do your own research and due diligence to confirm.
Discontinued coverage of the following, because of very low leverage.
Last covered at https://revealingfraud.com/2019/08/silver-gold/gold-stock-report-2-20-stocks/
https://www.orlamining.com/ Leverage: 3
https://luminagold.com/ Leverage: 6
https://www.rubiconminerals.com/Home/default.aspx Leverage: 6
https://www.northerndynastyminerals.com Leverage: 9
http://www.sabinagoldsilver.com/ Leverage: 9.2 (with capex, will be worse.)
https://www.defiancesilver.com/investors/stock-information Leverage: 10.2
https://www.k92mining.com/ Leverage: 11.9
160 million shares outstanding
x $1.43 share x .76 CDN/USD
=$174 million MC
4.2 Moz gold resource at 1.8g/t x $1500 = $6300 million
Average annual production: 225,100 oz/ year.
Working on feasibility study.
Capex: $355 million (HIGH CAPEX, BAD)
Leverage with Capex and Market cap ($355 + $174 = $529): 12
p. 23: – 786 million shares outstanding
x $.55 share x .76 CDN/USD
$329 million MC
Resources of 2.6 million oz. of gold at 0.7g/t.
2.6 million oz. x $1500 gold = $3900 million
Mine construction 95% complete!
Victoria is a near term producer, and could be valued another way: with a forward P/E of 2! (VERY LOW P/E GREAT!)
1167 million shares
$.68 share x .76 CDN/USD
= $603 million MC
West African gold producer, growing to 500,000 oz./yr by 2022
Set to produce 280,000 oz., 2019.
AISC of $1000/oz.
Forward Earnings: $500 net x 500,000 = $250 million.
p.11: Reserves and resources 5.5 million oz. x $1500/oz. =$8250
No capex needed. Producer.
Forward P/E: 2.6
145 million shares outstanding
x $.35 share x .76 CDN/USD
=$38.6 million MC
Goliath Gold Project in Ontario, Canada
1.46 million oz. gold at 2-3g/t x $1500 = $2190 million
Capex C $133 million .76 CDN/USD = $101 million
Leverage with Capex ($38.6 + $101 = $140 million) 15.6
354 million shares outstanding
x $.66 share x .76 CDN/USD
=$177.5 million MC
Madsen Red Lake Mine:
Probable Mineral Reserve of one million ounces at 9 g/t Au (HIGH GRADES, GOOD)
Indicated: 2.1 million + 0.5 inferred = 2.6 million oz. x $1500 = $3900 million
Capex, $95 million Cdn x .76 CDN/USD = $72 million
Leverage with capex: (72 + 177 = $249 million) 15.7
314 million shares outstanding
x $.125 share x .76 CDN/USD
=$30 million MC
Eagle Mountain in Guyana p.7:
total indicated & inferred:
380,000 oz. gold at 1.3g/t x $1500 = $570 million
Pre Feasibility study in progress, GOOD, no capex, BAD
95.2 million shares outstanding as of July 11th.
x $1.31 share
= $125 million MC
Three Bluffs resources:
1,244,000 oz. gold resources at 7.7 g/t
Combined Homestake & South Reef resources:
1,057,000 oz. gold resources at 5 g/t
Total gold: 2.3 million x $1500 = $3450 million
Leverage: 28 (capex not included or calculated, BAD)
313 million shares outstanding
x $.13 share x .76 CDN/USD
=$30.9 million MC
Both In-Pit and Out of Pit at San Albino, Mexico:
Indicated and Inferred
Total: 940,000 oz. gold at 5g/t x $1500 = $1410 million (HIGH GRADES, GOOD)
p.15 $21 million (LOW CAPEX, GOOD)
“All-in sustaining cost (AISC) gold equivalent (AuEq) of just US$395/oz(1), placing it in the lowest quartile in terms of costs in the industry (PEA)” (VERY LOW AISC, GREAT!)
Leverage with capex: (30.9 + 21 = $51.9 million ) = 27
$937 million MC
M & I: 61.5 million oz. gold at 0.5 g/t (LOW GRADES, BAD), but higher than Northern Dyanasty.
Inferred: 61.3 million oz. gold
Total gold: 122.8 million oz. gold x $1500 = $184,200 million
M & I: 278.5 million oz. silver
Inferred: 348 million oz. silver
Total silver: 626.5 million oz. silver x $17 = $10,650 million
Total gold and silver: $194,850 million
p. 16: $5 billion Capex (HIGH CAPEX, BAD)
Leverage with Capex and Market cap: ($5,937 million) 33
362 million shares outstanding
x $2.61 share x .76 CDN/USD
$718 million MC
M & I gold: 7.5 million oz.
Inferred gold: 5.8 million oz.
Total gold: 13.3 million oz. x $1500 = $19,950 million
M & I silver: 111 million oz.
Inferred silver: 151 million oz.
Total silver: 262 million oz. x $17 = $4454 million.
Total gold and silver: $24,404 million
Producing 190,000 oz. gold equivalent, at $1061 AISC. (all in sustaining costs)
Rough profit: $76 million.
PE: 9.4 (HIGH, BAD)
58.4 million shares outstanding
x $.12 share x .76 CDN/USD
=$5.3 million MC
Total indicated and inferred ounces
= 345,000 oz. gold 1.7 g/t x $1500/oz. gold = $517 million.
No capex or feasibility study yet. BAD
Leverage: 98 (GREAT LEVERAGE!)
FIRST PAID STOCK PICK:
Market Cap, $27 million USD.
Project is permitted.
Located in South America.
Project backed by an investor with a net worth of $25 billion.
Resources of 2.4 million oz. of gold at 4g/t. (VERY HIGH GRADES, GOOD!)
2.4 million oz. x $1500 gold = $3,600 million
Leverage with Capex of $110 million added to MC ($137) 26
For the name of this stock send $58 to:
SECOND PAID STOCK PICK:
Market Cap, $26 million USD.
Resources of 9 million oz. of gold at 0.8g/t (HIGHEST GRADES GOOD WITH HUGE LEVERAGE)
x $1500 gold = $13,500 million
Leverage: 519 (HUGE LEVERAGE, GOOD)
Leverage with capex of $464 million added to the market cap ($490): 27
For the name of this stock send $60 to:
THIRD PAID STOCK PICK:
Market Cap, $46 million USD.
Resources of 930,000 oz. x $1500 gold = $1400 million
No Capex, a producer! (SAFE PRODUCER WITH HUGE LEVERAGE, GOOD AND LOW P/E, GOOD)
AISC (all in cash costs) $931 Produced 70k oz. gold in 2018. Potential earnings: $30 million. (Confirmed, as they paid down debt by $25 million, nearly debt free now.)
PE (price to earnings): 1.5 !!!!!
What explains the low price on this one? A pit wall collapse collapsed the share price, which never recovered, although the company did.
For the name of this stock send $62 to: