Gran Colombia Gold($360M Market Cap):
- They have $138.2M in cash. Own roughly 72M shares of Aris Gold which is worth roughly $190M, 0.950M shares of Gold X worth about $26M, and 30M shares of Western Altas worth about $2.71M.
- They produce roughly 220,000 ozs of Gold a year, in a high grade underground mining operation. There all-in sustaining costs are about $1,100/oz and cash costs around $600/oz.
- At today's gold prices, it looks like they would be producing $172M in after tax earnings a year. With a P/E ratio of 2.1
- They pay a monthly dividend of 1.5 cents, which is about a 3.1% yield.
- They are buying back their stock(and warrants) around $5.25 to $5:75 and cancelling the shares.
- They have 27 historical producing mine sites, only 3 of which they are using for current production. This gives lots of space for expansion. They also partner with artisan miners, who are doing exploration for them, while making their own living.
- They are located in Colombia, which has political risk, but they can't print money and pay people to stay home. To me, this is very pro business. They pay a 33% tax(which is the main deterrent as an investor) so I'm sure the government wants to see their continued checks. And the people want to work.
- They had a big mark to market loss for Q4 2019. This seemed to be a mine that the company wasn't using, that was occupied by illegal miners. It sounds like they barricaded themselves in the area, and wouldn't allow company staff to enter the area. It lead to a $130M market down. This was a non-cash expense.
- Eric Sprott is a massive owner of the stock. From what I can tell, he owns about $40M in the company.(Which is how I heard about them this past weekend)
To me, it seems like a fantastic deal. I have been trying to figure out what is wrong with it. I welcome any criticism in my analysis.
It does seem like there is an incredibly bearish sentiment on the gold market/miners at the moment. So it seems possible for the sector to continue to drift lower. But I think the Gold miners will be minting money with low oil prices, low local currencies costs, & persistently high gold prices. Barrick effectively is doubling their 2020 dividend, Newmont raised theirs by 38%, etc.
I also like Northern Dynasty Minerals. They have roughly $1 trillion of metal in the ground, and sell for $600M. I got in at the end of December with them, and basically have take a Katusa free ride on my gains.