Almaden Minerals (AAU) is a prime buyout target and that has been the case for some time now, notes Gerardo Del Rio, editor of Junior Mining Monthly.
Despite that, the company is currently trading near 52-week lows for a combination of reasons. The most obvious and most recent reason for this is a well-known and influential newsletter service was recently stopped out of the stock.
That forced sell, combined with the tax-loss selling season, has driven the stock to ridiculously low prices and provides us with an early Christmas present.
I have never personally used stops with any junior but the low prices provide an excellent opportunity and I’m taking full advantage of it. Let’s do some simple math. The company is currently being assigned a market cap of Canadian $99 million or US $69 million.
The company is anchored by a robust treasury ($17 million as of the latest reporting period), a mint condition mill which will be shipped from Alaska (with a $70 million price tag) that the company picked up for C$7 million in cash and stock and it has a gold equivalent resource of 4.5 million ounces across all categories.
The entire market cap in US dollars is backed by the value of the mill. The gold and silver are free. The exploration update and the cash are also free. That should show you how cheap the stock is.
Almaden is well cashed up and not diluting anytime soon. The assets provide an anchor and regardless of tax-loss selling season and the possibility for a lower gold and silver price, Almaden will have a great 2018.
Consider these prices an early Christmas gift. Whether you want to use this opportunity as a trade, to initiate a position or to double down, I urge you to aggressively buy Almaden Minerals at these prices.
I anticipate a very sharp rebound in share price within the next few weeks and I’m doubling down on Almaden Minerals. I consider the stock a Buy under US$1.25 when buying under its NYSE listing, or under C$1.65 on the Toronto exchange.
Gerardo Del Rio is editor of Junior Mining Monthly.
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