How Wall Street May Be Buying Gold At A Discount
FN Media Group Present Oilprice.com Market Commentary
London – November 6, 2019 – Gold is soaring closer and closer to $1,500 per ounce right now, but imagine it was possible to get it for just $3 an ounce. That’s exactly what Wall Street is doing. It does this by targeting junior miners with major upside. Finding the undervalued global gold assets that will become the heart of the next gold boom. And if the research by Cantor Fitzgerald and GMP Research is anything to go by…one company is well positioned to ride the wave of the coming explosion in gold prices. Mentioned in today’s commentary includes: Seabridge Gold Inc. (NYSE:SA), Teck Resources (NYSE:TECK), Turquoise Hill Resources (NYSE:TRQ), Great Panther Mining (NYSE:GPR), Endeavour Silver Corp. (NYSE:EXK).
Euro Sun Mining (ESM – CPNFF), owner of the second largest gold mine in Europe. In fact, Canton Fitzgerald estimates that Euro Sun could be undervalued by as much as 500%, while GMP Research predicts a 671% gain.
That’s because we are running out of gold, and with geopolitical and economic fears soaring – the majors know that they need to find more. And that’s where junior miners like Euro Sun are set to win big.
It’s all happening in Romania. At a mine estimated to have over $13 billion in gold well within reach.
Euro Sun (ESM, CPNFF) now has 100% ownership of roughly 400 million tons of ore in three discreet bodies consisting of an estimated 7.1 million ounces of gold and a billion and a half pounds of copper working out to about 10.1 million ounces of gold equivalent.
So how does Wall Street find discount gold?
This is the math:
- Euro Sun has an estimated 10.1 million ounces in the ground at Rovina Valley.
- The price of gold right now is $1,490 an ounce.
- Euro Sun can extract this gold for under $800/ounce AISC (all-in sustaining costs).
- That means gold worth ~$7 billion AFTER all costs of extraction.
- Euro Sun is trading at only $0.32/share (CAD)
So, instead of paying around $1,500 an ounce for gold, Wall Street can get it for under $3.
A Wildly Undervalued Company
At a current gold price of $1,490 per ounce, Euro Sun (ESM, CPNFF) is sitting on an estimated $15 billion in gold and copper revenue. Yet, the company is currently valued at ~$26 million.
Rovina’s low AISC (All-in Sustaining Costs) of $752 an ounce leaves a healthy profit margin of $550 an ounce at current gold prices and a $60-$70 million free cash flow every year. This implies that Rovina and, consequently, Euro Sun Mining (ESM, CPNFF) should be valued much higher. In other words, right now, Euro Sun could be worth 140X its current value.
Again, Euro Sun is trading at only $0.32 right now, with a market cap of only ~$26 million (at the time of writing). Analysts know it’s worth more, perhaps far more. Cantor Fitzgerald’s short-term price target is $2.10. That would equal a massive 1,000% upside. GMP Research has given it a $3.00 price target, equivalent to a potential 1,500% increase.
And The Opportunity Is Getting Even Bigger
Wall Street is running for safe havens for two reasons:
- The Middle East is about to implode, with the brazen bombing of oil facilities belonging to the kind of oil, Saudi Arabia.
- In the middle of a never-ending trade war, smart money is already moving into hard assets because they see the equities bull run has gone on for far too long. It’s going to reverse, and gold is the key hard asset. That’s where everyone goes, first.
Recession is the anticipation amid a global economic slowdown that has seen a flattening of corporate profits. As billionaire investor Paul Tudor recently told Bloomberg, gold has everything going for it right now and could zoom to $1,700 per ounce in a matter of months. But the real money isn’t in buying the bullion itself. It’s in getting exposure to gold at a discount. A technique for buying ounces of gold at cents to the dollar.
One way to do this is to look for quality companies which are scaling rapidly behind the scenes.
Take Seabridge Gold Inc. (NYSE:SA), for instance. It is an ambitious young company that has taken the industry by storm. It has a unique strategy of acquiring promising properties while precious metals prices are low, expanding through exploration, and then putting them up for grabs as prices head upward again.
Or Great Panther Mining (NYSE:GPR). Great Panther is active in Brazil and Mexico where it explores for silver, gold, lead, and zinc ores. According to a recent statement in the press, the focus in the near-term will be on the integration of the Brazilian operations, the continued optimization of the Tucano gold mine, and advancing an exploration program to unlock the significant exploration potential of Tucano.” Now the company has managed to bump production and add to its reserves, the near-term catalyst needs to come from higher gold and silver prices.
Another sleeper set to enjoy a rally in precious metals is Endeavour Silver Corp. (NYSE:EXK). It operates three silver-gold mines in Mexico, but it’s also got three attractive development projects. Production has dropped and all-in sustaining costs have risen, leading to a negative cash flow. But the company has significantly reduced its debt, so its future is anything but bleak. Near term catalysts should be expected from the El Cubo and Terronera projects in Mexico, but real share price gains can’t be expected until gold and silver prices break out.
Gold mining is a tough business and getting progressively harder with the easy-hanging fruit in open pit mines now mostly gone. For every ounce a Barrick pulls out of the ground – they typically have 11-12 ounces in undeveloped projects. A large operator might have 60-80 million ounces of gold in proven reserves.
Wall Street can generate phenomenal returns by owning shares in A+ level companies, with A+ level deposits that aren’t yet in production. Instead of paying $1,450 per ounce from a gold broker. Wall Street can pay $100… $50, $25…even $3 per ounce. When gold inevitably skyrockets – Wall Street is likely to benefit from extraordinary leverage.
Though discount gold is always welcomed, Wall Street will often hedge their bets with diversified plays. Miners with exposure to a lot of different resources, including gold.
And Teck Resources (NYSE:TECK) could be one of the best-diversified miners out there, with a broad portfolio of Copper, Zinc, Energy, Gold, Silver and Molybdenum assets. Its free cash flow and a lower volatility outlook for base metals in combination with a potential trade war breakthrough could send the stock higher later this year.
Turquoise Hill Resources (NYSE:TRQ) is another strong resource play. The company mines a diversified set of metals/minerals including Coal, Gold, Copper, Molybdenum, Silver, Rhenium, Uranium, Lead and Zinc. One of the fortes of Turquoise hill is its good relationship with mining giant Rio Tinto.
$15B In Gold Ready to Get Out of the Ground—Now
Euro Sun isn’t just hugely undervalued; it’s also been completely authorized. Last November, Euro Sun defied the market by getting the approval and endorsement to go ahead with the Rovina Valley project after no one was allowed to touch it for over a decade. This April, they got the green light to begin mining activities.
Now they’re advancing it to construction. When Euro Sun did get the permit, the market was caught sleeping. It had already priced in the lucrative Rovina Valley as a definitive no-go. Gold is currently trading just under $1,500. If it bumps any higher–and plenty of bulls think it will–that undervaluation undergoes an even wider gap.
5 Reasons to Keep A Close Eye on Euro Sun (ESM, CPNFF)
#1 The best discount gold story in years
#2 Undervalued by 600-900% at $0.32/share with price targets of $2.10-$3.00/share
#3 $17M market-cap company sitting on $15 billion in potential gold and copper revenue
#4 A team led by legendary Canadian billionaire and mining financier Stan Bharti who has raised over $3 billion in capital for junior resource companies and their shareholders
#5 Fully permitted and de-risked, Rovina Valley is the second-largest gold mine in all of Europe
Discount gold like this simply won’t last. Euro Sun has defied the market once, but the market will wake up to it soon.
There’s an art to thriving in a market downturn—and it’s all about gold.
Gold stocks have been beaten down for far too long, and now they are just like a high-tension spring – ready to explode at the slightest nudge. Gold has everything going for it right now, with geopolitical and macroeconomic trends aligning in its favor.
Even if gold doesn’t continue soaring towards to $2,000 an ounce, the upside on Euro Sun (ESM, CPNFF) is all the same because it’s sitting on an estimated over 10 million ounces of gold and copper that can be extracted at under $800 an ounce. Any way one looks at it, this is gold for under $3 an ounce, but there’s no way that can last.
By. Ian Marsh
IMPORTANT NOTICE AND DISCLAIMER
PAID ADVERTISEMENT. This communication is a paid advertisement. Oilprice.com, Advanced Media Solutions Ltd, and their owners, managers, employees, and assigns (collectively “the Publisher”) is often paid by one or more of the profiled companies or a third party to disseminate these types of communications. In this case, the Publisher has been compensated by Euro Sun Mining, Inc. to conduct investor awareness advertising and marketing. Euro Sun Mining paid the Publisher fifty thousand US dollars to produce and disseminate this and other similar articles and certain banner ads. Euro Sun Mining also paid the Publisher additional sums as compensation for other marketing services earlier this year. This compensation should be viewed as a major conflict with our ability to be unbiased.
Readers should beware that third parties, profiled companies, and/or their affiliates may liquidate shares of the profiled companies at any time, including at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our articles experience a large increase in volume and share price during the course of investor awareness marketing, which often ends as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price may likely occur.
This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security. Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position. The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser. This communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC, SEDAR and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk. Past performance does not guarantee future results. This communication is based on information generally available to the public and on an interview conducted with the company’s CEO, and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher cannot guarantee the accuracy or completeness of the information.
FORWARD LOOKING STATEMENTS. This publication contains forward-looking statements, including statements regarding expected continual growth of the featured companies and/or industry. The Publisher notes that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the companies’ actual results of operations. Factors that could cause actual results to differ include, but are not limited to, the success of the company’s exploration operations, the size and growth of the market for the companies’ products and services, the companies’ ability to fund its capital requirements in the near term and long term, pricing pressures, etc.
INDEMNIFICATION/RELEASE OF LIABILITY. By reading this communication, you acknowledge that you have read and understand this disclaimer, and further that to the greatest extent permitted under law, you release the Publisher, its affiliates, assigns and successors from any and all liability, damages, and injury from this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.
INTELLECTUAL PROPERTY. Oilprice.com is the Publisher’s trademark. All other trademarks used in this communication are the property of their respective trademark holders. The Publisher is not affiliated, connected, or associated with, and is not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by the Publisher to any rights in any third-party trademarks.
DISCLAIMER: OilPrice.com is Source of all content listed above. FN Media Group, LLC (FNM), is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated in any manner with OilPrice.com or any company mentioned herein. The commentary, views and opinions expressed in this release by OilPrice.com are solely those of OilPrice.com and are not shared by and do not reflect in any manner the views or opinions of FNM. FNM is not liable for any investment decisions by its readers or subscribers. FNM and its affiliated companies are a news dissemination and financial marketing solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security. FNM was not compensated by any public company mentioned herein to disseminate this press release.
FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.
This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and FNM undertakes no obligation to update such statements.
Media Contact e-mail: email@example.com U.S. Phone: +1(954)345-0611