Gold and Silver miners (Jr and Exploration)

[Edge83]

GDQMF, GLDLF, KNTNF, and LRTNF

This posters top 20 has some favorites of this board:

Goldmining Inc. (10/10/2017)
Goldmining Inc. (previously Brazil Resources) stated strategy is to acquire advanced stage projects. They have done an incredible job achieving that strategy. In 2012, they acquired the Cachoeira project. After their initial drilling, the resource size increased from 750,000 oz to 1.3 million oz (1.2 gpt). Since then they have not attempted to move it to production, or advance any of their other projects towards production.

In 2013, they acquired Brazil Gold and their 1.7 million oz Sao Jorge project. This may now become their first mine. It has a PEA to produce 100,000 oz at $650 cash costs. The after-tax IRR is 33% at $1300 gold, thus it is very economic. I'm waiting for them to give guidance that a feasiblity study is underway. They have $16 million in cash and no debt.

In 2015, they acquired the Whistler project in Alaska from Kiska Metals. It is a 5 million oz deposit (.5 gpt), with copper offsets.

In 2016, they acquired the Titiribi project in Colombia from Nova Copper. It is an 8 million oz deposit (.5 gpt), with copper offsets.

In 2017, they acquired the Yellowknife project in Canada (Northwest Territories) for 4 million shares from Tyhee Gold. It is a 2.2 million oz (2 gpt) resource on 35,000 acres with significant exploration potential. The feasibility study calls for producing 100,000 oz for 15 years. It is not economic to finance at current gold prices, with a 20% pretax IRR at $1400 gold. That's around a 10% IRR post-tax at $1300 gold.

In 2017, they acquired the La Mina project (1.5 million oz) from Bellhaven Gold & Copper for $10 million by issuing shares. They gave Bellhaven shareholders 6% ownership of Goldmining Inc. They only paid a 20% premium, which was a fantastic deal for Goldmining Inc.

In 2017, they acquired the Crucero project in 2017 for 3.5 million shares and $750,000. The price they paid was a steal. It is an advanced 2 million oz (1 gpt) deposit. It's on 4,600 acres in Peru.

They also have several large properties in Brazil: Maua (25,000 acres), Pireneus (250,000 acres), Apa (500,000 acres), and Artulandia (12,000 acres). Once they get some cash flow, this will likely be a growth company. Their FD market cap has exploded from $36 million to $194 million, but it is still very cheap versus their resources.

I think this is a company with potential to become a very large company, once they decide to become development company. They have 800,000 acres of exploration targets and an aggressive management team. I get the feeling that they are not for sale (insiders own 25%) and want to grow this company. My concern is that they appear to be more about deal-making than mine building. I'm starting to think it is ironic that they renamed their company to Goldmining Inc. I'm not sure they want to be a mining company. However, worst case I think they will be a 5 bagger from their large projects and potentially more on the way. Once gold prices rise, they are going to have several large advanced economic projects.

Note: 9/16/2017. The jurisdiction for their Titiribi project in Colombia is considering banning all mining. If it passes, not only will Goldmining Inc's share price take a hit, but all development/exploration stocks in Colombia will get downward pressure. Each jurisdiction in Colombia can decide if they want mining.

Goldquest Mining (6/7/2017)
Goldquest Mining has an advanced gold project in the Dominican Republic. The Romero project is 2 million oz at 2.5 gpt with a 28% after-tax IRR at $1300 gold. It looks solid, with a capex of only $158 million. Cash costs are projected to be $400 per oz with copper, zinc, and silver offsets. But without the offsets it is still economic. Their FD market cap is $91 million with 10 bagger potential at higher gold prices and exploration success. They have $19 million in cash to complete permitting and the feasibility study, plus do more drilling.

They released a solid drill hole in May 2012 of 231 meters at 2.4 gpt. That single drill hole pushed the stock from 7 cents to $1. Then they released a monster hole of 258 meters at 4.5 gpt in July 2012. The stock doubled to $2. However, after that it crashed 90% to 8 cents. Today it is at 31 cents, although there has been significant share dilution since 2012. FD shares are now 293 million and they will likely dilute to build the mine.

They have 75,000 acres in the Dominican, including a 30 mile trend with five discoveries to drill. With their exploration potential, they should find more gold. I consider this an excellent speculation stock. If they make it to production in 2019 without damaging their cash flow potential with financing, they could be a growth stock. They are currently working on a feasibility study, which is due in Q4 2017. The only red flag is they could get taken out by a larger company, although they probably have enough insiders to prevent one.

K92 Mining (9/2/2017)
K92 Mining is an emerging mid-tier gold producer in Papua New Guinea. They purchased a past producing mine (2006 to 2009) from Barrick Gold for $2 million, plus $60 million in future payments. The Kainantu mine has about 1.5 million oz at 7 gpt, with extensive exploration potential and an additional 1.3 million oz of historical resources. Once they reach 1 million oz of production, or M&I resources, they have to pay Barrick $20 million (they currently have 250,000 oz M&I). Then they have to pay another $40 million as resources increase in size ($5 million increments for every 250,000 oz). I spoke with them and this will not likely get triggered for at least 7 years. Plus, the agreement expires after 10 years.

They began production in Q4 2016 at Irumafimpa. The CEO said he expects their cash costs to be about $600 per oz, with all-in costs (free cash flow) around $1000 per oz. They raised about $20 million to resume production. About half is debt, about 1/3 is a gold loan for 20,000 oz (paid over the first 36 months of the mine life), and the rest in equity financing.

They planned to reach full commercial production of 50,000 annual production in September 2017. However, this has been delayed 30-60 days due to vandalism. This caused their share price to drop.

In addition to their Irumafimpa mine and mill, which has about a 7-year mine life, they have a second deposit. Kora is already 1 million oz at 7 gpt. They plan to add Kora production of about 100,000 annually to their Irmafimpa mill in 2018. That will take production to 150,000 oz. Plus, they recently found a step out discovery at Kora that is 500 meters away. If that vein connects to Kora, then they just found a lot of gold to expand the mine life.

Kainantu is a large property (100,000 acres) with a lot of exploration potential. The CEO thinks they could find 8 million oz. If they find half that much, this stock should do really well. They have a solid team and with just a little bit of luck they will be able to grow. The risk/reward looks very good.

They have a strong board and will likely be successful. The key is going to be exploration and production growth, as well as higher gold prices. Plus, they need to hit their guidance targets for costs and production.

Pure Gold Mining (11/11/2017)
Pure Gold Mining has an excellent gold project in Red Lake, Ontario. It is a large property on 12,000 acres and high grade. It is already a 1.8 million oz deposit at 9 gpt. Everything about this project looks good. That is probably why Rob McEwen owns 10% of the company. Plus, it's a Mark O'Dea project. He has a midas touch. He is a director and started the company. It has a permitted 500 tpd mill, so permitting should not be a problem. They have exploration targets all over their property, so their resources should grow in size. It's in an ideal location. The capex is low at $50 million. Cash costs are low, below $700 per oz. And the after-tax IRR is about 50% at $1300 gold.

They have $25 million in cash and no debt. However, they are burning through cash with an aggressive drilling program. They have not yet announced when they will begin a pre-feasibility study. The only red flag is that it is no longer super cheap (1 year ago it was trading at 7 cents). But I think they will be a 5 bagger long term, and perhaps more with exploration success. Some investors might question the geology since it is near the Rubicon fiasco, however management says that the geology is well understood. A recent drill hole (6 meters at 45 gpt) shows the exploration potential.


Full list:
https://seekingalpha.com/article/4134895-top-20-gold-mining-stocks-2018