Category Archives: Gold Stocks

Golden Star Resources GSS | Penny Stocks


Shares of Golden Star Resources Ltd. (USA) (AMEX:GSS) is one of the few gold stocks which had been underperformed the broader market in the past few weeks.

Shares of Golden Star Resources Ltd. have fallen over 10% in the past one week, compared to a rise of about 5% in the prices of gold during the same period. Usually shares of gold mining stocks rises when gold prices rises as this increases their profitability.

Golden Star Resources stock is down 3.93% to $2.20 now, while Gold is up over 2.50% as increasing debt crisis and downgrade of U.S. debt pushed buyers to switch to safe haven investment and gold is the safest bet against inflation.

Shares ofGolden Star Resourcesmade a new 52-week low of $2.15 on Friday. In the previous trading session, the stock had shown high volatile with the stock made an intraday high of $2.39 and closed at $2.29, a rise of 0.50%.

Golden Star Resourcesstock is still down 52.61% so far this year, with most of the losses came in the month of Januarys and February.


Golden Star Resources Still Dropping



Shares of Golden Star Resourcesare trading well below its 50-Day Moving Average and 200-Day Moving Average prices of $2.50 and $2.96 respectively. The company had total outstanding shares of 258.56 million, of which 256.52 million were floating shares. Over 50% shares are held by Institutions and 0.82% by insiders.

For the recent year ended, Golden Star Resources Ltd. (AMEX:GSS) had revenue of $445.93 and profit of $6.90 million or 3 cents a share.

Golden Star Resources is a gold mining company with interests in Bogoso/Prestea and Wassa/HBB open-pit gold mines in Ghana indirectly.


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Penny Stocks high volume gainers: (NG, GSS, UXG, GBG, NGD)

AMEX high volume gainers: (NG, GSS, UXG, GBG, NGD)

NovaGold Resources Inc. (USA) (NYSEMKT:NG) reported the gain of 3.51% to close at $6.19 whereas overall traded volume stood at 1.41 million shares. NovaGold Resources Inc. (NovaGold) is a precious metals company, which is engaged in the exploration and development of mineral properties in Alaska, the United States and British Columbia, Canada. The Company conducts its operations through wholly owned subsidiaries, partnerships and joint ventures. The Company is primarily focused on gold properties, some of which also have copper, silver and zinc resources.

Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) went up by 1.24% and closed at $4.09 with total traded volume of 1.36 million shares in the last trading day. Golden Star Resources Ltd. (Golden Star) is an international gold mining and exploration company producing gold in Ghana, West Africa. The Company also conducts gold exploration in other countries in West Africa and in South America. It owns controlling interests in several gold properties in southwest Ghana. Through a 90% owned subsidiary, Golden Star (Bogoso/Prestea) Limited (GSBPL), the Company owns and operates the Bogoso/Prestea gold mining and processing operations (Bogoso/Prestea) located near the town of Bogoso, Ghana. Through another 90% owned subsidiary, Golden Star (Wassa) Limited (GSWL), it owns and operates the Wassa open-pit gold mine and carbon-in-leach processing plant (Wassa), located approximately 35 kilometers east of Bogoso/Prestea. GSWL also owns the Hwini-Butre and Benso concessions (the HBB properties) in southwest Ghana.

U.S. Gold Corporation (TSE:UXE) gained by 4.65% and closed at $4.95 whereas traded volume stood at 1.36 million shares for the day. US Gold Corporation (US Gold) is an exploration-stage company. The Company is engaged in the exploration for gold, silver, and other valuable minerals. It holds interests in several exploration properties in the State of Nevada and its properties in Sinaloa State, Mexico. The Company operates in two segments:  Nevada and Mexico. A majority of the Company’s Nevada properties, including its Tonkin and Gold Bar properties are located along the Cortez Trend, in north central Nevada. It also owns property, including its Limo property, on the Carlin Trend, which is located east of the Cortez Trend. The Company’s primary properties in Mexico include the El Gallo Project, the Magistral Mine Property, and the Palmarito Project, in addition to large amounts of unexplored land. The Tonkin Complex is divided functionally into five areas:  the Mine Corridor, Tonkin North, Patty, Keystone, and Tweed.

Great Basin Gold Ltd. (USA) (TSE:GBG) jumped up by 2.29% and closed at $1.79 with overall traded volume of 1.29 million shares in the last trading session. Great Basin Gold Ltd. (Great Basin) is engaged in the acquisition, exploration, development and trial mining of precious metal deposits. The Company has two material projects, both of which are at the trial mining stage, which consists of the Hollister gold project and the Burnstone gold project. The Company is also conducting early stage exploration on a number of other prospects, primarily in Tanzania and Mozambique. The Esmeralda property was for its ore processing facility, which the Company renovated. During 2009, the Company generated revenue of $33.7 million (US$28 million) from its Hollister operation. The ore was sold under the terms of various toll milling and ore purchase agreements to Newmont Mining Corporation and Echo Bay Minerals Company (Kinross).

New Gold Inc. (USA) (NYSEMKT:NGD) moved up by 2.05% and closed at $4.97 whereas total traded volume stood at 1.17 million shares. New Gold Inc. (New Gold) is an intermediate gold producer with a portfolio of global assets in the United States, Mexico, Australia, Canada, Chile and Brazil. The Company’s operating assets consist of the Mesquite gold mine (Mesquite Mine) in the United States, the Cerro San Pedro gold-silver mine (Cerro San Pedro Mine) in Mexico, and the Peak gold-copper mine (Peak Mine) in Australia. In June 2009, New Gold completed its business combination with Western Goldfields Inc., pursuant to which New Gold acquired all of the issued and outstanding common shares of Western Goldfields. In February 2010, Goldcorp, Inc. announced the acquisition of a 70% interest in the El Morro project, an advanced-stage, copper-gold project located in north-central Chile, Atacama Region. Pursuant to an agreement, El Morro is owned 70% by a subsidiary of Goldcorp, Inc. and 30% by a subsidiary of New Gold Inc.

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Kinross Gold Corporation (NYSE:KGC)

As you might have noticed, all kinds of gold stocks have dropped in value considerably more than the actual spot price of the commodity. There is a lot of value developing in the gold sector of the stock market, and it’s time to be looking at new positions.

There’s no catalyst yet for gold prices to spike or begin a new upward trend, and accordingly, there’s no catalyst for gold stocks to accelerate just yet. We may see the spot price of gold jump if the Federal Reserve decides to enact further stimulus for theU.S. economy. Regardless, stock market valuations are becoming much more attractive, and I think it’s increasingly likely that spot gold will accelerate throughout 2013.

Kinross Gold Corporation (NYSE:KGC) illustrates perfectly the disproportionate performance of a gold stock versus the modest decline in the spot price of the commodity. Kinross has had a tough year on the stock market and was trading well over $15.00 a share this time last year.

 

Another example of a gold stock that’s had a tough time on the stock market recently is IAMGOLD Corporation (NYSE/IAG), which basically lost half its value since November of last year. Weaker prices for gold stocks are pretty much across the board—from large-caps to micro-caps. The stock market has been disproportionately hard on gold stocks this year, and that is why I’m saying that speculative investors should now be taking a closer look at the sector.

The most important attribute that a gold mining company can offer you is rising production. Institutional investors know that the spot price of gold can be volatile, but nobody expects the commodity to collapse or anything even close to that. Spot gold over $1,000 an ounce is total gravy for a gold miner. The vast majority of producers have cash costs around $500.00 an ounce. As an investor, all you really need to find are those companies on the stock market with solid expectations for rising production on a near-term basis and one year out. Despite all the cash that’s been thrown at the gold mining sector over the last few years, there actually are very few small gold companies that have this expectation. Just like anything else, extracting resources from the ground is a tough business.

The stock market is going to be in trouble if the Federal Reserve doesn’t take further action. It’s unfortunate that the stock market is making this bet, but that’s how it is. Everything, including gold and oil, is vulnerable if the Federal Reserve doesn’t do more to help the economy. Unless the economic data suddenly take off to the upside, the outcome rests with the Fed.

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Precious metals stocks

Mining companies are mostly undervalued in this market. While the spot price of silver is lagging with other precious metals, gold prices are holding up well, and there remains a lot of anticipation about an upward price spike in that commodity.

If I had one precious metal in which to speculate it would be gold, even at its current level. Mining companies still have lots of cash on their balance sheets, and the way the world is going, gold is likely to become a reserve currency. If things in the global economy get better, then gold will accelerate in price; if they don’t, global investment risk should keep gold prices right around current levels. The stability in today’s gold prices is very helpful for mining companies that can better plan their operations with an underlying commodity that’s not going down.

Surveying the universe of mining stocks, I definitely view the group as undervalued. There are now a number of well-managed mining companies with solid production growth that are cheaply valued on the stock market. This is the way it works in the mining sector; the Street basically ignores the group until the spot price of gold has already moved, and then institutional investors pile in. I’d be a buyer of select mining companies in this market at this time, and it’s because of the value, not my expectation for rising gold prices.

Even large-cap mining companies are currently taking it on the chin. Consider Barrick Gold Corporation (NYSE/ABX), which was trading around $47.00 a share at the beginning of the year. Currently trading around $32.00 a share, the spot price of gold is down only slightly since January, yet ABX is down about 50.0%.

 

Barrick Gold is currently trading at a price-to-earnings ratio of less than eight and has a dividend yield of 2.5%. The stock is right at its 52-week low and is one of the few mining companies with solid expectations for earnings growth in 2013. Barrick Gold is a large-cap stock, but it clearly illustrates how institutional investors have abandoned the gold sector. In my view, the trading action in the majority of mining companies highlights an attractive new entry point for investors.

Spot gold looks like its getting ready for a breakout on the charts, but to do so it will need a catalyst. I think there’s a good chance for gold to break out of its current trading range based on new policy action from the Federal Reserve and in Europe. As a group, mining companies have been beaten up pretty good, and valuations are attractive. As I say, gold needs a catalyst for another big move. I think one is not too far off.

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