LRTNF - Pure Gold Mining: Cheap But For A Reason
- Pure Gold Mining released its Q4 and FY2021 results last week, reporting annual production of ~26,900 ounces, a massive miss vs. H2 guidance of ~29,500 ounces.
- While we have seen a significant shake-up in management since Q3, production fell on a sequential basis in Q4, and the forward guidance suggests a slower ramp-up than planned.
- Although it's possible we could see a turnaround, the steady share dilution has continued, and given the weak balance sheet, it's likely to persist this year.
- While Pure Gold trades at an enterprise value typically reserved for a developer, not a producer, I continue to see the stock as cheap for a reason, and an inferior way to play the gold price.
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Pure Gold Mining: Cheap, But For A Reason