Aris Mining Corp (ARMN)

[geodan]

Wrote the below comment on new Seeking Alpha GCM article https://seekingalpha.com/article/4501285-gcm-mining-pre-construction-at-toroparu-has-begun

Good info on Toroparu project. Good to see people writing up GCM more. You have done that multiple times.

I have been in it for 5 years, since it was $1. Today it is far cheaper at $4.66 than it was at $1 in 2017. Back then it was 50/50 they would survive, terrible debt problems plus high ASIC. The execution since then (it is new management) has been spectacular. I spent an hour on phone with Mike Davies back then and was impressed and that is how got in it.

Last month or so have thought that GCM and Galane are the two best value gold miners out there, and not irrationally have made them my 2 biggest positions. Both have ignored progress and the gold price, as Fun's chart shows for GCM.

Both have been held back by a big seller/s, IMHO. Galane's big seller/s went away on Monday and it has gone up 20% since then. I have a writeup on Galane you can not see in articles as it is a blogpost. For those interested in it, here: Buy Profitable And Future 110,000oz Miner Galane Gold For $26.6 Million, Comparison To $316 Million Pure Gold https://seekingalpha.com/instablog/535947-darp-research/5648819-buy-profitable-and-future-110000oz-miner-galane-gold-for-26_6-million-comparison-to-316 Galane has super trounced Pure Gold since then.

Before GCM was likely the best of the two value/safety wise, now with Galane's 50% rise in last month think GCM is clearly the #1 value in gold miners today. It would take 20 pages to say why. Why is it not 2 or 3 or 4 times higher today than it is?

My guess is that big seller/s whether from a prior deal or whatever. Karora had the same problem, but in the last 2 years since Covid bottom it is up over a 7 bagger. It was in Oct 2021 that the irrational selling of Karora went away and it has soared since.

Have noticed the biggest and fastest rallies often happen when a big seller that prevents a stock from rising goes away, when they run out of stock. That has not happened for GCM yet. But any day it can. And when that happens a 50% rise to $7 could easily happen in 30 days. The current holders are tearing their hair out in frustration. They see GCM as doing everything right, making huge amounts of money in last 2 years, setting themselves up to massively grow, paying a big (for miners) monthly dividend, and buying back lots of stock. Yet the stock is flatlined while gold and other gold stocks are taking off. No doubt wearing some out, causing more selling.

But like Karora and Galane the selling can not last forever. Can no one not see the value in GCM? No, Redcloud said this 3 weeks ago:
Valuation:
We maintain our BUY rating and target price of C$18.00/sh. Our target is based on a 0.9x multiple for Segovia and 0.6x for Toroparu applied to our NAV5% estimate of $25.64/sh (was $26.38). Upcoming Catalysts:
1) Q4/21 financial results and 2022 guidance (Q1/22), 2) annual mineral reserve and resource update (Mar/22) and
3) Toroparu PFS (Q1/22). https://cdn-ceo-ca.s3.amazonaws.com/1h36gbj-20220223-GCM-Update-1.pdf

They are calling for a triple. Most people that buy stocks have zero idea what they are buying. They do not know the market cap of the company is, what the free cash flow is, what the debt level is, etc. That is how stocks get so super miss-valued, like Cisco in 2000. That company was good but because most investors have no value anchor they overvalued it so insanely that it has never been that high in the 22 years since, a horrible investment, even though the company is far far bigger and more profitable today.

This creates opportunity for those that can value a company.

GCM now has a EBIT Earnings Yield of 40% before taxes, an Allen EV/EBITDA of 2.20 and a PE of 2.33. Their return on capital employed (ROCE) is 66%. This is just for Segovia, it is ignoring their numerous other assets such as Toroparu which will be a bigger mine than Segovia, their ARIS public stock worth $85 million, and on and on.

It is as absurd a valuation as KRRGF stock was at .65 two years, which is now $5.83, except that GCM has higher growth prospects than Karora did two years ago. Unless there is a liquidity crash there is no reason for GCM to ever see $4 a share again, is how see it.

Cheers