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Summary
- Gold stocks have been rallying strong this year, and gold penny stocks present an attractive investment option with potential upsides.
- Yamana Gold Inc inked a deal with Monarch Gold to acquire its Wasamac and the Camflo properties for approximately C$200 million.
- The stock of Amex Exploration Inc. gained over 100 per cent YTD.
- Amarillo Gold stock is up 70 cent YTD.
Gold stocks have been rallying strong this year, and gold penny stocks priced below $5, present an attractive investment option for investors with potential upsides. Those with high-risk tolerance can invest in penny stocks. It can insulate your portfolio and provide positive returns in the long run. However, as with every investment decision, investors need to be cautious and have sufficient information about the company’s liquidity, stock performance, analyze their growth graph and plans, before investing in penny stocks.
Here are three gold penny stocks to consider: Monarch Gold Corporation (TSX:MQR), Amex Exploration Inc. (TSXV:AMX) and Amarillo Gold Corporation (TSXV:AGC)
Monarch Gold Corporation (TSX:MQR)
Current Stock Price: C$0.59
Monarch Gold Corporation is an integrated mining company engaged in the acquisition and exploration of gold mining properties located in and around Quebec, Canada. The company holds interest in gold properties such as the Camflo Mill, Beaufor Mine, Beacon Mill, Croinor property, Wasamac and others.
The company aims to become a 100,000 to 200,000-ounce per year gold producer by tapping into projects in the Abitibi camp, Quebec. Combining the four advanced projects of the company namely Beaufor, Croinor Gold, McKenzie Break and Swanson, it produces 650,000 ounces of gold.
Recently, Yamana Gold Inc inked a deal with Monarch Gold to acquire its Wasamac and the Camflo properties and mill for approximately C$200 million. Yamana will be paying shareholders of Monarch approximately C$60.8 million in cash and C$91.2 million in shares.
The gold stock gained over 170 per cent YTD. Current market capitalization of the company is C$186 million and earnings per share is C$0.04. The stock holds profit-to-equity (P/E) ratio of 12.10, profit-to-book (P/B) ratio of 2.667, profit-to-cash flow (P/CF) ratio of 115.30, as per TMX data. Positive return on equity (RoE) and return on assets (RoA) of 16.98 per cent and 11.39 per cent, respectively.
For the fourth quarter ended June 30, 2020, the company’s cash and cash equivalents stood at C$11.27 million, as compared to C$6.38 million in the same period last year. The total investments of the company were C$14.39 million in Q4 2020, as compared to C$2.32 million in Q4 2019. The company sees a revenue decline from C$31.65 million in Q4 fiscal year 2019 to C$6.68 million in Q4 fiscal year 2020. The gross margin stood at C$4.13 million in Q4 fiscal year 2020.
Amex Exploration Inc. (TSXV:AMX)
Current Stock Price: C$3.10
Canada-based Amex Exploration Inc. is an exploration company focused on developing viable gold and discovering base metal deposits. The company is engaged into several mining projects that include Perron gold property located in Abitibi region of Quebec, and Lebel-Sur-Quevillon gold project in the north western part of Quebec, among others.
The stock gained over 100 per cent YTD. Current market capitalization of the company is C$238.72 million. The stock holds profit-to-book (P/B) ratio of 7.9 and profit-to-cash flow (P/CF) ratio of 106.7. Cash and cash equivalents of the company as of June 30, 2020 stood at C$25.73 million, as compared to C$4.13 million in the same period last year. Net earnings (loss) in the second quarter of 2020 is C$61.67 million, as compared to a loss of C$373.26 million in the same period last year.
Cash flow from operations is C$2.85 million for Q2 2020, as compared to a loss of C$688.35 million in the same period last year.
Amarillo Gold Corporation (TSXV:AGC)
Current Stock Price: C$0.35
Amarillo Gold Corp is primarily engaged into exploration of gold and acquisition of mineral properties in Brazil including the Mara Rosa project and the Lavras do Sul project. The Posse Gold project on the company’s Mara Rosa property is the company’s flagship asset, which is currently in development stages.
According to updated research coverage from Couloir Capital Ltd., the company had 382.1 million shares outstanding, approximately C$57 million in cash and a market cap of approximately C$115 million.
The stock is up 70 cent YTD. Current market capitalization of the firm is C$92 million. The stock hold profit-to-book (P/B) ratio of 3.50. In the second quarter of 2020 (for the period ended June 30), the recorded a loss of C$435.66 million, as compared to C$975.63 million in Q2 2019. Total general and administrative expenses for Q2 2020 was C$555.45 million as compared C$662.34 million in Q2 2019.
