Today we’re giving you a peek at updates on a pair of positions from the November issue of Nick Hodge’s Wall Street’s Underground Profits.
While these stocks are above their buy prices in the portfolio, there will be plenty of new opportunities to come. Be sure to sign up to get them as soon as possible.
Take care,
Adam English
Editor, Outsider Club
Teranga Gold (TSX: TGZ)(OTC: TGCDF)
This has been one of our better performers, up 76% in two years.
Its operating mine in Senegal, called Sabodala, continues to perform and will drop more dollars to the bottom line next year when the royalty on the project goes from 9% of production to 6%, with Franco Nevada paying 20% of spot.
Its second mine, Wahgnion in Burkina Faso, is on track to first achieve commercial gold production by year-end. Teranga built Wahgnion $15 million under budget.
Combined, they’ll produce 300,000-350,000 ounces of gold next year.
Teranga has another project called Golden Hills, also in Burkina Faso, that has a 644,000-ounce resource on it. That project is currently undergoing 27,000 meters of drilling that will support a preliminary economic assessment (PEA) next year.
Click for the Q3 update from the company.
It is currently trading at C$5.45 per share. Our buy under is C$3.75, which the company hasn’t seen since June. I’m raising it to C$5.00, which means you should be buying on pullbacks.
K92 Mining (TSX-V: KNT)(OTC: KNTNF)
K92 Mining has been another big winner for us, up 83% since we got in nine months ago.
Its phonetically similar Kainantu mine in Papua New Guinea produced 18,636 ounces of gold, 209,287 pounds of copper, and 5,284 ounces of silver, or 19,170 gold equivalent ounces, in the third quarter.
The mine is performing incredibly, already producing more in three quarters of 2019 (58,610 gold equivalent ounces) than it did in all of 2018 (47,237). It has a very high head grade of 19.2 grams per tonne gold.
This increased production comes amid disruptions stemming from upgrades to underground infrastructure associated with an ongoing expansion of the Kora deposit.
It is expecting to produce as much as 80,000 ounces of gold equivalent this year, ramping to 120,000 ounces after the expansion. The expansion also comes with lower all-in sustaining costs, which will fall from an already low US$820/ounce to below US$700.
The NPV on the expanded project after tax is US$559 million and the company is being valued at US$330 million. So it isn’t fully valued as is. Plus, there is ongoing drilling showing great results.
Shares trade at C$2.15 and we’re buying them below C$2.00.
To get more insights and full issues from Nick, check out this Wall Street’s Underground Profits Special Presentation.
