There’s something wonderfully ironic about a gold mining company offering penny stocks. Perfectly exampled, Yamana Gold has a market cap of $2.6 billion, yet its shares sell for under $3.00. Go figure.
In fact, at the time of writing, Yamana Gold (TSX:YRI) stock is selling for $2.18 USD. It is up 2.11% on the day.
Here is a company that is a small stock in share price only.
Gold Penny Stocks
Yamana Gold is a Canadian gold producer with mines in both North and South America.
2017 was not a great year for this penny stock. Actually, the company has managed to miss Wall Street’s profit per share consensus for five consecutive quarters. Ouch! This is not exactly what investors want to hear.
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However, the potential for growth with this company is staggering. Simply for its additional mining assets and production numbers, which are set to boom.
New Mines
First up! The company opened an additional mine this year—the Cerro Moro. In its first three years of production, Cerro is expected to yield an annual average of 150,000 ounces of gold and 7.2 million ounces of silver.
Also this year, Yamana recommissioned C1 Santa Luz. This mine is expected to add an average of 114,000 ounces of gold annually over the approximate 10-year lifespan of a mine.
Then there’s the smaller Suruca development within the Chapada mine, which is expected to begin producing next year. This mine should yield anywhere between 45,000–60,000 ounces of gold annually for up to five years.
With all this new production, revenue is expected to be boosted by 33%. This should then boost cash flow per share by 50%. Now that is what investors do want to hear. If it can deliver, this gold penny stock will be hot property once again.
According to financial analyst Sean Williams:
“Gold investors shouldn’t overlook a number of macroeconomic catalysts that could positively impact Yamana’s margin. For instance, even though higher interest rates are generally bad news for spot gold, we’re seeing plenty in the way of domestic and international political uncertainty, and the US dollar has been pushing to greater than one-year lows.”
Trends would suggest that the dollar and gold move in opposite directions. The price of gold is going up and so should Yamana’s margin. Keep an eye on the YRI penny stock.
Featured Image: Depositphotos/© Luftklick
