Aris Mining Corp (ARMN)

[NYBob]

Gran Colombia Gold Is a BUY -
The Canadian miner has several catalysts
June 05, 2019 | About: TPRFF +0% TSX:GCM +0% GOLD +0% GDXJ +0%

https://www.gurufocus.com/news/889968/gran-colombia-gold-is-a-buy-

Due to tensions between the U.S., China and Mexico, the S&P 500 Index
has fallen 4.4% over the last month, renewing investors’ interest in
safe-haven assets such as precious metals.

As a result, gold prices are uptrending again.

The bullion closed at $1,324.25 per troy ounce on the London market on
Tuesday, which reflects 0.5% upside from Monday and a 3.1% rise from
the average price of $1,283.95 per ounce for May.

Tuesday’s closing price was also up $27.35 per troy ounce, or 2.1%,
compared to the cumulative average of $1,296.90 for the year so far.

Since the U.S.'s trade tensions with China and Mexico may go on for some
time, there is a chance gold will hit $1,400 an ounce in the coming
weeks.



Therefore, in order to benefit from the expected gold bull market,
investors should increase their positions in publicly traded gold
producers that have proven to be more volatile than the commodity.

Gran Colombia Gold Corp. (TSX:GCM)(TPRFF) meets these criteria.

Warning! GuruFocus has detected 2 Warning Signs with TPRFF. Click here
to check it out.
TPRFF 30-Year Financial Data
The intrinsic value of TPRFF
Peter Lynch Chart of TPRFF
The stock of the Toronto-based operator of gold and silver properties
in the mining areas of Marmato and Segovia in Colombia has risen 12%
over the past 52 weeks through June 4, outperforming the VanEck Vectors
Junior Gold Miners (GDXJ) exchange-traded fund by 17%.
The index is a benchmark for the industry.



The stock is poised to continue performing well, returning to its
shareholder margins that will be above the industry average.

Two analysts who were surveyed recommended buying shares of Gran
Colombia Gold. They issued an average target price of $5.70 per share,
indicating an impressive 110.3% gain over the next 52 weeks.

Besides the expected rise in the price of gold, analysts’ projections
are based on the following catalysts.

A solid balance sheet that GuruFocus scored with a rating of 6 out of
10.
As of March 31, the company's cash position was $40.2 million and the
total long-term debt amounted to $28.5 million.
The existence of robust operations, which are comparable to large gold
producers like Barrick Gold Corp. (NYSE:GOLD) in terms of
profitability.
Gran Colombia Gold has a trailing 12-month earnings
before interest, taxes, depreciation and amortization margin of 23.2%
versus the Barrick Gold's margin of 22.1%.
The release of a preliminary economic assessment, including results of
a project's economic viability that technicians of Gran Colombia are
assessing at Marmato.
As the miner has several operations there, the
exploration team is pondering the possibility of building a second
major underground mining operation.
The PEA decision should be announced before the end of the year.
Since the new deposit will produce a yearly average of 125,000 ounces
of gold, or about 55% of the top end of the 2019 guidance range of
210,000 to 225,000 ounces, for at least 12 years, the news is sure to
boost the share price if it receives adequate promotion.
Gran Colombia also focuses on exploration, development, infrastructure
upgrades and construction activities at its Segovia operations.
Here, the company is undertaking drilling campaigns to support future
production growth through an increase in mineral reserves and a mine
life extension.
The company will fund the drilling campaign with net proceeds of
approximately $13.6 million from the placement of
convertible notes with maturity in 2024.

The stock doesn’t appear to be expensive.

After a 12% rise over the 52 weeks through June 4, the closing share
price of $2.7 on Tuesday was substantially above the 50- and 200-day
simple moving average lines and slightly over the 100-day line.
The market capitalization is $130.06 million.



Further, the price-book ratio of 0.48 is below the industry median of
1.62 and the enterprise value-Ebitda ratio of 2.41 is below the
industry median of 8.71.

The 14-day relative strength index is 58, suggesting the stock is
neither overbought nor oversold.

The closing price on Tuesday was 0.7% above the 52-week low of $2.68
and 2.2% below the 52-week high of $2.76.

On the Toronto exchange, the stock closed at 3.62 Canadian dollars
($2.68) per share on Tuesday with a market capitalization of
approximately CA$174.85 million.

Disclosure: I have no positions in any securities mentioned.

Read more here:
Abaterusso is a freelance writer based in The Netherlands. He primarily
writes about gold, silver and precious metals mining stocks.
His articles have also been widely linked by popular sites, including
MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org,
CNBS, MSN Money, Zachs, Reuters and others.
Alberto holds an MBA from Università degli Studi di Bari (Italy),
Aldo Moro.