We’ve been looking for a profitable mining company trading near its low, and Asanko Gold (AKG) meets that criteria, explains small cap and low-priced stock expert Bill Mathews, editor of The Cheap Investor.
Asanko Gold explores and develops gold properties. Its principal project is the Asanko Gold Mine, which consists of the Obotan Project and the Esaase Project located in the Amansie West District of the Republic of Ghana, West Africa.
The Asanko Gold Mine is being developed in phases. Construction of Phase 1 was completed in January 2016 within budget and a month ahead of schedule.
Commercial gold production was announced on April 1, 2016 and steady state operating levels achieved during 2016. The project is fully funded with a debt facility of $150 million.
Insiders own about 7% of the 203 million shares outstanding, and 84 institutions own 59% of the float (shares in public hands). For the quarter ended March 31, 2017, institutions sold 1.3 million more shares than they bought.
However, the company has a decent balance sheet with just under $60 million ($0.30 per share) in cash, a book value of $2.06 per share and a debt of $155 million. A large debt is not unusual for a mining company, and Asanko Gold is actually producing gold and is profitable.
Negative factors are that the stock price is on a downward trend and gold commodity prices have been stagnant lately.
Asanko Gold is a speculative, gold mining company that has good revenues and earnings, especially compared to last year. If the Company continues its growth, the stock should do well. If gold prices rise, the stock should move up with it.
