5 Gold Stocks With Recent Insider Buying | Seeking Alpha https://seekingalpha.com/article/4372125-5-gold-stocks-recent-ins...

5 Gold Stocks With Recent Insider Buying

Sep. 2, 2020 11:57 AM ET6 comments | 46 Likes
by: Gold Mining Bull

Summary

Insider buying has picked up at a few gold stocks recently.

Insider buying refers to when insiders of a company, such as the management team or
board of directors, purchase shares of company stock.

This is generally a positive sign, and I've found that insider purchases are often well-
timed transactions.

I break down recent insider purchases.

This idea was discussed in more depth with members of my private investing community,
The Gold Bull Portfolio. Get started today »

5 Gold Stocks With Recent Insider Buying

I've been tracking insider buying closely, trying to spot any signs of a buying opportunity in
the gold & silver sector. Despite the recent rally in gold & silver prices, there's been some
positive insider trading activity lately.

If you are unfamiliar with the term insider buying, it refers to when insiders of a company -
such as CEOs, directors or major shareholders - buy shares of company stock on the
public market or privately.

There are many reasons why an insider sells a stock, but there is really only one reason
why they buy: they are bullish on the company's stock, meaning they feel it is undervalued
or mispriced, and will rise.

While insider trading activity is far from the only thing to consider when evaluating a gold
stock, I believe that tracking insider buying regularly has helped me outperform the
VanEck Gold Miners Index (GDX), by spotting good opportunities. For example, it drew
my attention to past winning picks like Pure Gold (OTCPK:LRTNF), and True Gold and
Avnel Gold (two gold juniors that got taken over at a substantial premium a few years
ago.)

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Investors tracking insider buying should also consider the size of the purchases compared
to the market cap of the company and the annual compensation of the insider, and if the
purchase occurred in the public market, or through an option exercise, warrant exercise,
or private placement financing.

Here, I've listed the most relevant and recent insider buying in the gold & silver sector for
the month of August. Data was pulled from SEDI (a document filing and retrieval system
for Canadian public companies) and CanadianInsider.com. Here are some relevant insider
buys I've found for the month of August.

1. GT Gold (OTCPK:GTGDF)

Data by YCharts

GT Gold is a gold exploration company focused in British Columbia's Golden Triangle. It

owns the Saddle North Project, which is a large-scale gold-copper porphyry deposit that
has more than 8 million ounces of indicated and inferred gold resources, and 4+ billion
pounds of copper. The company is advancing the project towards a preliminary economic
assessment in H2 2020.

The Saddle South Project is a high-grade, near-surface gold target located 3 kilometers
from Saddle North, and it has produced some very high-grade drill results recently,
including 9.55 g/t gold over 40.89 meters and 10.00 g/t gold and 46.84 g/t silver over

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53.73 meters.

The company is evaluating the potential to mine from Saddle South in the early stages of
its mine plan, to produce enough cash flow to fund development of the lower-grade
Saddle North deposit.

Here's a summary of recent insider purchases:

- On August 14, James Rutherford bought 100,000 shares of stock at C$1.34. Rutherford
is the executive chairman and director of GT Gold and has close to 30 years' experience
in mining and metals.

- July 10-30, The K2 Principal Fund L.P. bought a total of 478,400 shares at prices ranging
from C$1.39 to C$1.80.

- Directors and management currently own 11.9% of the company, while major gold miner
Newmont (NEM) owns approximately 15%, according to GT Gold's corporate
presentation. Prominent gold & silver investor Ross Beaty holds 8.9% of its shares.

There's a lot of upside potential with GT Gold - I like the insider ownership and recent
buying, the location of the asset in a top mining jurisdiction, and the potential for a large,
low-cost mine, which looks like it may be similar to the nearby Red Chris mine, which is

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owned by Newcrest (OTCPK:NCMGF) and Imperial Metals (OTCPK:IPMLF).

Also note that GT Gold shares also haven't run up in price nearly as much as its peers,
and so investors might be buying at a good price here ahead of its upcoming PEA study in
late-2020; I think a positive PEA study could be a catalyst for a higher stock price.

As for the risks involved with GT Gold, this is still an early-stage explorer and has no cash
flow from operations. Therefore, it needs to issue equity to raise money for its exploration
activities. While higher gold prices help its financing efforts, there's no guarantee it will be
able to raise money in the future, and shareholders will likely be diluted. Exploration is a
risky business with no guarantee of success.

2. Silver Dollar Resources (SIDRF)

Data by YCharts

Silver Dollar Resources is a new silver company that completed its initial public offering in
May 2020. Its projects include the development-stage La Joya Silver Project in Durango,
Mexico, and the discovery-stage Pakwash Lake and the Long Legged Lake properties in
the Red Lake Mining District of Ontario, Canada.

La Joya is very promising, as it is located close to past-producing and operating mines in

Mexico including Pan American Silver's (PAAS) La Colorado mine and First Majestic's
(AG) La Parrilla and Del Toro mines. Silver Dollar has an option to buy up to a 100%

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interest in the La Joya property from First Majestic Silver. It has a historical resource
estimate of 159.7 million silver equivalent ounces.

"We engaged some expert help to assist in our due diligence review of the historical
data on the project and the unanimous feedback is that La Joya has incredible
exploration and development potential, particularly in light of the significant move in
metals prices since we signed the letter of intent." - Mike Romanik, president of
Silver Dollar, in a recent news release.

The company's most recent drilling at La Joya returned some pretty significant hits,
including 1,778 g/t silver equivalent over 2 meters.

Here's a summary of recent insider purchases:

(Source: CanadianInsider.com)

- You'll see above that insider Blair Lawrence Naughty, a 10% holder of shares, bought
150,000 shares at prices ranging from C$1.45 to C$1.95 between August 13 and 25.

- Insider Joseph Smulders, CFO and secretary at Silver Dollar, sold 30,000 shares at
prices ranging from C$.801 to C$.90 in late July.

Silver Dollar has an exciting, early-stage silver property in Mexico, plus some early-stage
properties in Canada. With a market cap of just $40.47 million and the potential for a

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50-100+ million ounce silver resource (based on the historical resource estimate),
investors who buy here appear to be getting in at a very early stage and at a low
valuation.

As for the risks, this stock is very new to the market, and there's extremely low trading
volume on the US listing. The Canadian listing (SLV.CN) is only slightly more liquid. Silver
Dollar is the earliest stage company on this list, and it has yet to develop an economical
silver deposit. Like GT Gold, there's no guarantee it needs to issue equity to raise money
for funding exploration, and there's no guarantee it will be able to do so in the future.

3. Condor Gold (OTCQX:CNDGF)

Data by YCharts

(TSX listing above)

Condor Gold is a junior gold developer advancing the La India gold project in Nicaragua,
located near Calibre Mining's (OTCQX:CXBMF) El Limon mine. Its goal is to build a mine
capable of producing 100,000+ ounces of gold per year, with a 1+ million ounce resource
base.

Based on a pre-feasibility study, the mine is estimated to produce 80,000 ounces annually
over 7.5 years from a single open pit, at all-in sustaining costs of $700/oz. However, this is
based on its probable mineral reserves (675,000 ounces) and does not include the

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potential to upgrade any of its 1.23 million ounces of resources to reserves through infill
drilling.

Here's recent trading activity, and ownership information:

- On August 14, non-executive director James Mellon bought 125,000 shares of stock for
$0.505, worth $109,604. Mellon a renowned fund manager, owns 15.4 of Condor Gold,
according to the company.

- Ross Beaty owns 5.8% of the company. Beaty is the chairman and founder of Equinox
Gold (NYSEMKT:EQX) and Pan American Silver.

I like the company's upside potential at La India, but Condor's stock has extremely low
trading volume in the US, so it is a better option for investors with access to its London or
Canadian listing (symbol COG on the TSX.) Condor is a small company and is likely
several years out from producing cash flow from operations. I view this stock as a
speculative takeover candidate.

4. Nighthawk Gold (OTCQX:MIMZF)

Data by YCharts

Nighthawk Gold is a junior gold developer which owns the Indin Lake gold property in
Northwest Territories, Canada.

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The company recently reported an updated resource estimate at Indin Lake. At the
Colomac deposit, it reported 1.67 million ounces of gold indicated (2.01 g/t), and .37
million ounces inferred (2.03 g/t); at Damoti, located 28 KM south of Colomac, it reported
120,000 ounces in inferred resources (4.97 g/t). The company converted resources into
higher confidence categories (inferred to indicated), and average grades increased by
24% to 2.01 g/t.

Nighthawk also recently completed a $12 million private placement financing, offering. The
company issued a total of 5.87 million units; certain directors and officers of the company
participated and purchased 52,000 Units and 52,200 "flow-through" shares for aggregate
proceeds of $188,150. The company now has $17 million in working capital, according to
the news release.

"These funds allow us to complete our 2020 exploration program and set ourselves
up for an expanded program next year. We are excited to continue advancing our
work at Colomac and to have to ability to further explore some of our high-priority
targets that exist within our Indin Lake Gold Property." - CEO Dr. Michael Byron.

Nighthawk shares have been an underperformer in the gold sector, but insiders at the
junior gold developer appear to be betting on a turnaround:

- Robert Douglas Cudney, a 10% holder of Nighthawk and founder of Northfield Capital
Corp., acquired 150,000 common shares at a price of $1.696 on August 12, worth
$254,355.

- Board and management own approximately 5% of the company, according to

Nighthawk's website. Other key insiders include Kinross Gold (KGC) and Osisko Gold
Royalties (OR), which owned 9.9% and 8.6% of the company, respectively, as of July
2020. No insider selling for Kinross or Osisko has been reported this year.

Nighthawk looks like a speculative bet on a future takeover as I expect Kinross or another
senior gold miner to make a bid for the company at some point in time, likely when
Nighthawk has advanced the project to the feasibility stage.

I like the company's exploration upside and leverage to gold prices, and support from
insiders and major shareholders. As for the risks, Nighthawk's project is still very early
stage and several years away from production, and there's no guarantee Nighthawk will
be able to monetize this asset, whether through a sale of the company or putting it into
production.

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5. First Majestic Silver

Data by YCharts

First Majestic Silver is a primary silver producer focused solely in Mexico, operating the
San Dimas, Santa Elena and La Encantada mines, as well as several development
projects. The company aims to produce more than 21 million silver equivalent ounces in
2020, at all-in costs between $12.29 and $13.45/oz.

I felt that First Majestic made a smart move this year when it purchased a silver stream on
First Mining's (OTCQX:FFMGF) Springpole project in Canada. At a cost of $22.5 million in
cash and shares, and ongoing payments of 33% of the spot price of silver, First Majestic
gets 50% of the silver produced at the mine. This deal was made when silver prices
traded at $18/oz, well below the current spot price of $28/oz.

Several insiders have been purchasing shares recently despite the run-up in its stock:

- Todd Olson Anthony, VP of investor relations, bought 5,000 shares at C$15.95 and 2,500
shares at C$14.79, on August 18 and 25. Olson also bought 10,000 shares at C$15.15
and C$15.85 on August 14 and 17.

- Ana Magdalena Lopez, director, bought 565 shares at C$15.23 on August 24. Lopez was
appointed to the board of directors on June 9. She has over 20 years of experience in
human resources and is currently the Vice-President Human Resources and People

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Development at the British Columbia Institute of Technology, according to First Majestic.

- Wheaton Precious Metals has a 9.6% stake, while First Majestic's President and CEO,
Keith Neumeyer, owns 1.7% of the company, according to First Majestic's investor
presentation.

First Majestic is arguably the best way to gain leverage to silver prices, with silver over
$25/oz the company is likely to be highly profitable, and its new Springpole silver stream
gives it even more leverage to silver prices.

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Disclosure: I am/we are long GTGDF. I wrote this article myself, and it expresses my own opinions. I am not receiving
compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is
mentioned in this article.

Comments (6)

LDR123
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10 Sep 2020, 05:34 AM

CWarrior95
Premium Marketplace
What exchange trades these stocks?

04 Sep 2020, 09:33 AM

progolffour
Thank you,good info

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02 Sep 2020, 08:56 PM

arkhipov
NHK has been drilling and exploring for a few years already I think, but you still say it's very early stage.
How many years would you maybe expect it to take to reach a point where Kinross or someone else might
take it over?

02 Sep 2020, 03:15 PM

bengalesq
Premium
Thanks for the article. Another just on just GT?

02 Sep 2020, 01:39 PM

cuajwl
Nice article. Thanks for sharing

02 Sep 2020, 12:31 PM

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