NIA Announces its #1 Stock Suggestion for 2019
Fiore Gold (TSXV: F)
Currently $0.23 per share
Shares Outstanding: 97.72 million
Market Cap: $22.48 million
Cash: $7.185 million
Debt: $0
Enterprise Value: $15.3 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 $13.784 million with mine operating income of $3.762 million. During the first three quarters of 2018, Fiore generated revenue of $33.555 million with mine operating income of $9.896 million.
Fiore currently has total working capital of $17.35 million, which if subtracted from its market cap of $22.48 million, gives Fiore’s mining operations and gold resource a current valuation of only $5.13 million – when it generated $9.896 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 $825.4 million based on the current gold price of $1,227 per ounce!
Currently, most publicly traded gold exploration companies are receiving at least $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 $100 per ounce would value Fiore’s measured and indicated gold resource of 672,700 ounces at $67.27 million. Added to Fiore’s working capital of $17.35 million would give it a market cap of $84.62 million, which would equal a share price of $0.87!
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 $58.2 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 $58.2 million on top of Fiore’s working capital of $17.35 million would give Fiore a market cap of between $75.55 million and $133.75 million, which would equal a share price of between $0.77 and $1.37!
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 $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 $487.9 million.
Tim Warman and Ross MacLean plan to increase Fiore’s annual gold production to 150,000 ounces in the upcoming years!
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