NIA is pleased to announce its #1 stock suggestion for 2019:
Fiore Gold (TSXV: F)
Currently $0.23 per share
Shares Outstanding: 97.72 million
Market Cap: CAD$22.48 million
Cash: CAD$9.51 million
Enterprise Value: CAD$12.97 million
Fiore Gold (TSXV: F) is a gold producer and explorer with the producing Pan Mine in Nevada as well as a suite of exploration projects in Nevada.
Fiore has increased its gold production from 3,780 ounces in 1Q 2018, to 8,695 ounces in 2Q 2018, to 9,964 ounces in 3Q 2018, and to 11,858 ounces in 4Q 2018.
In 3Q 2018, Fiore generated revenue of CAD$18.24 million with mine operating income of CAD$4.98 million. During the first three quarters of 2018, Fiore generated revenue of CAD$44.41 million with mine operating income of CAD$13.1 million.
Fiore currently has total working capital of CAD$22.96 million, which means Fiore's rapidly growing mining operations and huge gold resource is currently receiving no value at all - even though it generated CAD$13.1 million in mine operating income over the last nine months!
Fiore's Pan Mine has a measured and indicated gold resource of 434,000 ounces! Its Gold Rock project contains an additional 238,700 indicated ounces of gold! This gives Fiore a total measured and indicated gold resource of 672,700 ounces!
Fiore's measured and indicated gold resource of 672,700 ounces has an in-ground gold value of USD$825.4 million based on the current gold price of USD$1,227 per ounce!
Currently, most publicly traded gold exploration companies are receiving at least USD$100 per ounce in value for their measured and indicated gold resources of similar grade located in top tier mining jurisdictions like Nevada. A valuation of USD$100 per ounce would value Fiore's measured and indicated gold resource of 672,700 ounces at USD$67.27 million or CAD$89.03 million. Added to Fiore's working capital of CAD$22.96 million would give it a market cap of CAD$111.99 million, which would equal a share price on the TSX Venture Exchange of $1.15!
Based on Fiore's 4Q 2018 gold production of 11,858 ounces, the company is currently producing gold at an annualized rate of 47,432 ounces, which at the current gold price is equal to annualized revenue of USD$58.2 million or CAD$77.02 million. Considering that Fiore would have reported a large net profit over the last nine months if not for a one-time impairment charge due to Fiore terminating an option agreement for a gold property in Chile, Fiore on a very conservative basis deserves a valuation of between 1 and 2 times annualized revenue. A valuation of 1-2X annualized revenue of CAD$77.02 million on top of Fiore's working capital of CAD$22.96 million would give Fiore a market cap of between CAD$99.98 million and CAD$177 million, which would equal a share price of between $1.02 and $1.81!
Fiore's CEO Tim Warman was most recently the President of Dalradian Resources prior to it being acquired by Orion Mine Finance this year for CAD$537 million.
Fiore's COO Ross MacLean was most recently the general manager of Taseko Mines Limited (TGB)'s flagship Gibraltar Mine where he led a team of 500 employees. TGB's Gibraltar Mine produces 140 million lbs of copper per year, giving TGB a current enterprise value of CAD$487.9 million.
Tim Warman and Ross MacLean plan to increase Fiore's annual gold production to 150,000 ounces in the upcoming years!
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. Never make investment decisions based on anything NIA says. This message is meant for informational and educational purposes only and does not provide investment advice.