Source: Fincom Investment Partners for Streetwise Reports 01/11/2018
While miners have bounced off their December lows, what is in store for 2018? Fincom Investment Partners profiles a handful of companies it believes have an opportunity to double in 2018.
December’s annual tax ritual provided a number of opportunities. While miners have bounced off the December lows, the year is just getting started, so now what? Going forward, we prefer shares offering fundamental value improvement, which may increase share price in both a rising gold environment, and, if it so happens, another flat or soft year. These stocks have an opportunity to double in 2018 even if the mining sector remains flat.
Silvercorp Metals Inc. (SVM:TSX; SVM:NYSE). Bet you did not know that in the last (available) quarter (Q317), Silvercorp earned more money than Helca, Coeur Mining, First Majestic Silver, SSR (formerly Silver Standard), Tahoe, Endeavour Silver and Klondex COMBINED. A Canadian company, its high-grade silver mines in China produce a strong zinc/lead by-product, thus earnings have been excellent. We have the company at about an 8X current year PE. With $100 million in cash and no debt, SVM’s $438 million market cap easily makes it the best value in silver mining.
In terms of China operations, by now, all skeptical doubts are finished. We believe there is less risk as a tax-paying operator in China, than about anywhere in Latin America, Africa, etc. Following the company for several years now, we have found management solid and conservative. We cannot say the shares are this cheap entirely because of poor investor communication, as there is almost no investor communication. We have also spoken with a former, highly experienced and well-regarded senior mining exec who visited the properties in depth and offered a highly favorable opinion, calling it “one of the best properties I’ve ever seen.” In addition, Silvercorp now owns 32% of New Pacific Metals; already with nearly a billion ounces, this Bolivian silver developer has company-maker potential.
Marathon Gold Corp. (MOZ:TSX; MGDPF:OTC.MKTS) did not have much of a tax loss season as shares were up 125% in 2017, although consolidating for the past 11 months. We think that is a “tell” and great set-up; as shares outperforming the indexes, combined with heavy insider buying, confirms our view that this Newfoundland project is not only going to be a very profitable gold mine, but still a relative value. Already at nearly 3 million gold ounces, ongoing drilling is hitting consistently; initial PEA underway for Q2. Proven, serious and highly skilled management team has done it before, from grass roots exploration to ultimate sale. Well financed, without over-issuing warrants. Something we like. The good news is that management does very little to promote the shares, so you are not buying a lot of fluff. The bad news is there isn’t much of any promotion; you may have to sit with shares during consolidation …read more
Source:: The Gold Report