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XMFSinchiruna (26.58)

5 All-Stars of Gold's Junior League



July 08, 2010 – Comments (6) | RELATED TICKERS: NXG.DL , JAGGD , GSS

Hi Fools. This one was certainly a labor of love, requiring an intensive multi-day journey through the websites, earnings statements, press releases, presentations, and statistics of these five junior gold producers to see how they stack up amongst each other.

I hope you will appreciate the result and walk away with a broader understanding of the group and the prospects they offer in a rising price environment for gold. Please do share your thoughts on which are your favorites and why, and please also be sure to recommend the article at the source and vote in the Motley Poll.

Thanks as always for your continued readership, and please let me know if you have any questions.


"As I have revealed to my readers of late, my own investment focus within the gold sector has moved steadily away from the major and mid-tier producers, landing among the higher-growth prospects of the junior miners. Although select exploration or development-stage companies may offer even greater growth prospects, I encourage Fools to consider the strategic compromise offered by those small-cap miners that are already producing gold within this high-margin operating environment."

"Northgate Minerals (AMEX: NXG) is my personal favorite of this all-star line-up. For starters, Northgate enjoys substantial cash reserves (net of total debt!) of $178.2 million. With a share price beneath $3, it's hard to ignore a cash position that accounts for some $0.61 per share. Thanks to prolific copper reserves of 2.36 billion pounds, Northgate's reserve base dwarfs the competition with a present market value of $11.6 billion. Construction is now under way at Young-Davidson in Ontario, which is expected to add 180,000 additional ounces of gold per year beginning in 2012."

"As they so often do, I believe that the CAPS community collectively has already done an outstanding job of ranking these five junior mines according to their relative value and emerging growth potential. Northgate Minerals and Jaguar Mining have both earned a four-star CAPS rating, and I believe that their comparatively lower EV/MVPPR values and slated production growth spurts justify that confidence. Given the likely reserve growth forthcoming at Joanna, and buried treasures like the nearly 600,000 ounces of indicated resources already identified at Aurizon's newly optioned Marban Block in Canada's Malartic gold camp, I give a clear edge to Aurizon shares over those of the Golden Star. Under the circumstances, a meager two-star ranking is well deserved by Gammon Gold, though I remain cautiously optimistic on the company's long-term prospects."


As you can see, my vote went to Northgate Minerals. Which of these five producers is your pick to outperform the rest? If your pet junior producer isn't on this list, then please discuss why it remains your top choice among junior gold miners.

I'm looking forward to reading your feedback and ideas.

6 Comments – Post Your Own

#1) On July 08, 2010 at 4:13 PM, XMFSinchiruna (26.58) wrote:

OOPS!! :O  I forgot to post a link to the article.

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#2) On July 08, 2010 at 4:21 PM, XMFSinchiruna (26.58) wrote:

Also, while I'm at it, wanted to share this recent article that I forgot to post here:

Do the Double-Dip Double Take

To my amazement, the older poll that I linked to get more votes out with respect to broad macroeconomic expectations resulted in a significant uptick among those expecting a slow but sustained recovery over those anticipating a double dip.

Please see the poll in question and vote your conscience here.

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#3) On July 08, 2010 at 8:08 PM, 100ozRound (28.68) wrote:

3 of my holdings are on that list so I had to vote for AZK since it currently has the fewest votes

Good stuff!

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#4) On July 09, 2010 at 11:39 AM, binve (< 20) wrote:

Fantastic article, thanks my man!

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#5) On July 09, 2010 at 12:17 PM, mhy729 (30.52) wrote:

Always enjoy reading your work...many thanks for sharing the fruits of your laborious efforts!

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#6) On July 11, 2010 at 1:20 AM, uclayoda87 (28.73) wrote:

Any comment on the legal problems of NGD in Mexico?  The stock price came back a little on Friday after a significant sell off for most of the week.

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