#2 in top gold stocks for 2017 (seeking alpha)Couldnt agree more... Very very very undervalued.
#2 Avnel Gold (OTC:AVNZF)
Avnel made this list because I think 2017 is the year this company gets bought out by a larger gold miner.
Avnel is developing its 80% owned Kalana Main project in Mali, West Africa; it has declared a 2 million ounce open pit reserve base at 2.8 g/t gold at Kalana. A definitive feasibility study gives the project strong economics: at $1,200 gold, it carries an after-tax net present value (5% discount) of $196 million, with a rate of return of 38% and all-in sustaining costs averaging just $595 per ounce in the first five years of production ($784 per ounce over the mine life). Production will average 148,000 ounces annually at 3.6 g/t gold. Initial capex of $196 million is pretty reasonable when you consider the projected payback of under 2 years.
Avnel is so high on this list because I feel the company is just too undervalued here. It carries an enterprise value of $60.6 million as of writing, which is well below the $196 million after-tax NPV of Kalana. The stock also trades at a price to net asset value of .40X as of writing, which is lower than all of its peers except Orezone Gold, according to Avnel's corporate presentation.
While Avnel is currently planning on bringing Kalana to production itself (according to the company, it has initiated project financing discussions with lenders), I think the company will get bought out in 2017 given its undervaluation and the strong economics of Kalana. I see Endeavor Mining and Randgold as two potential suitors, although other Africa-focused miners may be interested.