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Penny Stock Pick of the Week: Minco Gold Corporation

Gold Mining

Gold Mining

As a global investor you might be looking for an affordable penny stock in the mining industry. Our pick in this industry for the month of February is Minco Gold Corporation (MGH). The Canadian mining company is involved in the direct acquisition and development of high grade, advanced stage gold properties.

The company is known to be engaged in exploration and evaluation of gold deposits in China. Minco Gold through it subsidiary Minco China holds 12 exploration permits in the Longnan region of south Gansu Province, within the southwest Qinling gold field in China.

Production of Gold in China

Production of Gold in China

The recommendation is based on the belief of the increasing investor demand and price for gold moving forward. Minco Gold wholly owns a number of subsidiaries which include Triple Eight Mineral Corporation (Temco), Huaihua Tiancheng Mining Ltd., Yuanling Minco Mining Ltd., and the aforementioned Minco Mining Corporation.

The company also purchased 13 million shares which gives it a 22.15% interest in Minco Silver at the end of 2011.

In January of 2014 Minco announced new drilling in Newfoundland Canada. This is a result of the July 2013 purchase of the Buchans Mineral Corporation. The company has begun a new effort at Clementine West in the search in high grade sulphide deposits.

The purchase of Buchans also gave them control over the Woodstock Manganese project in New Brunswick as well as the Lundberg Project.

Other projects that Minco is engaged in include the exploration and development of zinc-lead projects in the United Kingdom, Ireland and Canada.

In addition, Minco has interests in zinc-silver projects in Mexico through its holding of 30 million shares approximately 29% in Xtierra Inc.

Gold Ore

Gold Ore

Furthermore, Minco holds a 2% NSR royalty on the Curraghinalt gold property in Northern Ireland which is being explored by Dalradian Resources Inc.

The 52 week range has gone from 0.12 to 0.60 as of yesterdays market close. The most dramatic increase has been since the beginning of the year.  Although one can expect a major retrenchment of this stock for the month of February because of the rapid rise of this stock in January the trend for the first half of 2014 should be upward bound.  The time to buy this stock will be when it reaches or better yet, drops below 0.42 to account for the market correction of this stock.

The stock price for the company has increased 142.33% since August of 2013. The increase for 2014 alone is 261.45%.

The company has 50.35 million shares outstanding and a market capitalization of $23.66 million.

The fundamentals for this company look good for both the short and long term.

 

 

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