Friday, December 13, 2024
Happy Friday the 13th!
As 2024 grinds towards a close, although the price of the yellow metal is up massively this year, we are again experiencing, in many junior gold stocks, a painful tax-loss selling season.
This means there are some blatant opportunities to position oneself in stocks that present good short term and long-term potential.
Most of the stocks that have been discussed in SGL in the past, and that are underwater, may have rerating potential.
One stock of particular interest is First Mining Gold (FF.TO). After a hitting a 2020 high of $1.30, the stock is now trading at only $.13.
The quality of management with Dan Wilton as CEO and Keith Neumeyer as Chairman may present an averaging down strategy. These insiders have done just that recently.
The senior goldminers now enjoy record margins and are accumulating enormous cash piles.
They will soon need to start replenishing reserves.
There are only a very limited amount of development companies with big assets in safe jurisdictions.
First Mining Gold has not one but two big economic deposits that it believes can be put into production.
Springpole in Ontario host 5,000,000 ounces of gold and according to their 2021 PFS could produce 330,000 ounces per year.
Duparquet in Quebec has 6,000,000 ounces and could produce 200,000 ounces per year.
Whichever metric you use, First Mining Gold may appear massively undervalued. It trades at less than a dollar per ounce in the ground and much less than 10% of its net present value.
The stock has been crushed by relentless selling by a fund which was a major shareholder. This institutional shareholder is apparently finished selling. On top of that tax loss selling should soon start to abate. This may present favorable timing.
Springpole has filed its EIS and could have its mining permits within one or two years. For Duparquet in Quebec it could take only two or three years.
This $170 million market cap company has huge leverage on the price of gold, since for every $100 increase in the price of gold, the NPV of the company increases by more than its total market capitalization.
For more views from SGL Contributor, Mr. Claude Bejet, please see his recent interview with Ronald Branstetter (Ron’s Basement).
The interview is available here:
Disclaimer: SGL does not provide investment advice and is not a registered investment advisor. Always do your own due diligence before making an investment. Investing in securities, especially junior miners, can be risky and never invest money you cannot afford to lose. SGL cannot guarantee the accuracy of the information in this post. SGL has attempted to present the information fairly, but it may own shares of the companies mentioned so bias cannot be excluded. SGL or its contributors have no relationship with any companies mentioned. SGL or its contributors may buy or sell shares at any time.
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