These Are the Most Undervalued Canadian Gold Mining Companies
November 24, 2022 (Investorideas.com Newswire) Gold is a great hedge against excessive market volatility and raging inflation, even in the most brutal market environments.
It has outperformed both stocks and bonds this year.
While the S&P 500 index, a widely known benchmark for stocks, is down around 16%, long-term bonds lost over 30%.
At the same time, gold remains relatively stable, with only a 3% loss in price.
And yet, we may see higher gold prices as the global economy remains on the edge of collapse.
It's not too late to diversify your portfolio with gold and protect your savings.
Moreover, you can leverage gold gains with a unique set of junior gold miners. These companies work in the gold space and often multiply the metal's return.
Below, we'll show you the most undervalued gold mining stocks trading at bargain prices.
These companies are listed in Canada, on Toronto Stock Exchange (TSX), or its venture branch (TSXV). These two exchanges host hundreds of mining companies and provide strong liquidity to investors.
You'll have no problem investing in the best junior gold mining stocks on these platforms.
Finding the Most Undervalued Stories
Junior mining companies work on early-stage projects. These projects often have defined gold resources in the ground, and investors can estimate the value per ounce of gold for each company.
On average, junior mining companies are trading at $34 per ounce of gold. It means a company with one million ounces of gold in NI 43-101-compliant resources is expected to trade at $34 million in enterprise value (EV).
Compared to the well-known market capitalization (market cap) measure, EV better represents the company's real value. It accounts for cash and debt on the company's balance sheet.
We found several companies trading below $34 per ounce of gold. These may potentially close their valuation gap and generate positive returns for their investors.
However, you should always do your own due diligence and keep in mind that investing in small-cap companies is risky.
Let's dig in...
1. Revival Gold Inc. (RVG.V)
Revival Gold is a Toronto-based company with its flagship Beartrack-Arnett gold project in Idaho, USA.
The project has 4 million ounces of gold with a head grade of 1.14 grams per tonne (g/t). It is a sizeable asset located in a pro-mining state.
Based on its EV, Revival Gold is trading at $9.60 per ounce of gold. That's72%lower than the industry average.
The company is well-funded, with $2.5 million in cash and no debt.Revivalhas just completed a 22-hole drill program at Beartrack-Arnett, with results expected in the coming months.
Revival is an excellent and undervalued gold story.
2. Allegiant Gold Ltd. (AUAU.V)
Allegiant Gold is based in Vancouver, Canada. Its operating office is located close to its flagship Eastside project in Reno, Nevada.
Today, Eastside has a NI 43-101 compliant resource of1.4 million ounces of gold at 0.54 g/t gold grade. Based on this size, the company is trading at $8 per ounce of gold. Another case of a deep disconnect with the industry average.
The project may have expansion potential. In late September, Allegiant discovered a gold zone outside the known resource area.
The drill hole ES-258 returned 51.5 meters of gold mineralization with 7.5 meters of 1.3 g/t gold. That's a great sign of possible expansion potential.
The company aims to continue an aggressive drill program at the project and plans to expand its mineral resources.
3. GoldMining Inc. (GOLD.TO)
GoldMining is the most undervalued story among the junior gold stocks on our list.
The company is trading at $5.60 per ounce of gold in its resources. That's extremely cheap compared to its peers.
GoldMining also has the largest gold resource among the three companies we reviewed. The total tally is 26 million gold ounces across eleven world-class gold projects.
The company operates in the Americas, with its head office inVancouver, Canada.
It's the largest junior miner on our list, and it is the cheapest one in terms of value per ounce of gold.
These Canadian gold mining stocks are trading at a deep discount to the average industry value of $34 per ounce of gold.
- Revival Gold Inc. (RVG.V):$9.60 per ounce of gold
- Allegiant Gold Ltd. (AUAU.V): $8 per ounce of gold
- (GOLD.TO): $5.60 per ounce of gold
Now is the best time to protect your portfolio with gold stocks. Investing in deeply undervalued gold companies at bargain prices may be a prudent decision.
As always, do your own research before investing.
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