LONDON, April 8, 2019 /CNW/ -- This is a story that began over 2,000 years ago when the Romans uncovered $16.8 billion in gold...Using only hammers and buckets. And more recently, in a small town near the heart of this treasure trove. Miners may have identified even more. Mentioned in today's commentary includes: Kinross Gold Corporation (NYSE:KGC), Agnico Eagle Mines Ltd (NYSE:AEM), Yamana Gold (NYSE:AUY), Eldorado Gold Corp. (NYSE:EGO), First Majestic Silver (NYSE:AG).
Over $13.3 billion in deep-veined gold, in fact. But everything came to a screeching halt in 2007. All mining was put on hold. And desperate prospectors were scrambling to get back in. But only one has been able so far.
A little company armed with big ambitions and game-changing tech has received the green light to unearth the rest. Using modern technology, they're hoping to exploit an estimated $13.3 billion find.
GMP research says this little company could realize $550 per ounce profit. And their mine is so promising, Barrick Gold have invested $20 million to develop it. The company's stock, according to Cantor Fitzgerald, "is inexpensive by any and all metrics."
Based at their mine in Rovina, Romania, Euro Sun Mining Inc. (ESM, CPNFF).has 400 million tons of ore, with billions of dollars' worth of gold and copper locked inside. Cantor Fitz thinks they are undervalued by 218% and GMP Research predicts a 355% gain.
Here are five reasons to follow Euro Sun closely in 2019:
#1 Re-Discovered $13 Billion Romanian Treasure
The Ancient Romans excavated $16.8 billion in gold from this area of Romania, minting coins that were scattered across an empire 11 million square miles in size.
The problem? Acquiring permits can be labor-intensive and sometimes impossible, thanks to EU regulation.
Back when permits were available, Barrick Gold, the world's most valuable gold miner, got in on the action: the company pumped in $20 million to develop Rovina.
Now Rovina is owned by Euro Sun… and Euro Sun has done the impossible... it just got its hands on a mining permit. The Rovina mine has been classified as a "highly scalable" asset, with an immense growth potential, according to Cantor Fitzgerald.
Mines like Rovina are hard to come by, even though the area is rich in ore. And Euro Sun (ESM, CPNFF) has gotten around its toughest problem – acquiring the licenses it needs to start developing Rovina's full potential.
A resource statement from 2012 offers a view of the potential riches: 400 million tons of ore in three bodies, roughly 7.1 million ounces of gold and a billion and a half pounds of copper, or 10.1 million ounces of gold equivalent.
In February 2019, Euro Sun completed its Preliminary Economic Assessment (PEA) for Rovina. The mine looks ready to produce an average gold equivalent of 139,000 ounces and 1.6 million over twelve years. All told, the company is looking at $9.3 billion in gold and $4 billion in copper… a total haul of $13.3 billion.
#2 When Gold Moves a Little, Little Miners Move Hundreds of Percent
Analysts are optimistic that prices should continue to climb, potentially exceeding $1400/ounce, due to declining gold stores. Right now, gold stocks are trading cheap, as they have been since January. But one thing that investors and speculators often forget, is how explosive gold-stock upside is when gold moves higher. And, when gold goes up, gold companies tend to do very, very well.
Every 1% move in gold can send a small miner up 10% or more... And a 10% move can send a small miner up 100% or more. Back in 2016, gold prices jumped 26% in 6 months… and gold miner returns were stellar.
Mid cap miners such as Endeavour Mining Corp gained 196% in 6 months, while its Ontario based competitor IAMGOLD gained 256% in that same timeframe.
But some of the real winners were the shareholders of small cap miners.
Argonault Gold's share price jumped 298% in 6 months, and its peer Great Panther Mining saw its share price even jump by a whopping 340% in no more than 4 months after it reported a 19% in gold production.
#3 Speculation: Euro Sun to be Acquired by Chinese Soon? China Just Spent $1.4 Billion Down the Street.
China is making a big global investment push, as part of its $900 billion "Belt and Silk Road" initiative. Chinese investment along the road is surging, covering 68 countries.
China wants to acquire assets along the Silk Road route—gold, silver, copper, and more—and that route runs right through Romania. And the Chinese have just paid $1.4 billion to acquire another mining asset in the area.
China's nearby acquisition could also take years to fully license. And Euro Sun (ESM,CPNFF), on a site with ZERO ancient ruins is even better positioned for a multi-billion dollar payday.
The Rovina mine is fully licensed. It's poised to become one of the biggest gold and copper mine in Europe. It's right next to a major Romanian mining town of Brad, which has already excavated $17 billion in gold in the last 100 years.
#4 "Undervalued by 218%" -- Cantor Fitzgerald "355% Gain" -- GMP Research
In 2016, GMP declared Euro Sun the "new old kid on the block," declaring the company had 10 MILLION OUNCES in gold equivalent waiting to be dug up. And the numbers look even better now than they did three years ago.
It's no wonder that GMP noted Rovina has "robust economics and upside…If another ounce is never found, Euro Sun already owns a potentially extremely robust project." GMP's estimate has been upheld by Cantor Fitzgerald, which completed its own estimate in early 2019.
The deposit at Rovina "carries strong economics on a standalone basis." The only thing holding Euro Sun back is the fact this is happening in a small company... far away from the lights of Wall Street.
The management at Euro Sun (ESM, CPNFF) knows what it's doing. The company is led by CEO and President G. Scott Moore, a business executive with twenty-five years' experience in the resource sector, and the former EVP of Sulliden Gold and Director of Avion Gold.
#5 The 2nd Biggest Gold Mine in Europe Could Soon 30X
When gold moves a little, miners like Euro Sun can move A LOT. And the company has already gotten positive attention.
Barrick, the world's largest gold miner, once invested $20 million into the Rovina mine. The asset has been developed and has fallen into Euro Sun's lap. Now all it needs to do is exploit it. Cantor Fitzgerald puts Euro Sun's short-term target at $2.10. That's a 218% increase from its current price. And GMP goes even further: they reckon Euro Sun is worth $3.00, an increase of 355%.
Euro Sun (ESM, CPNFF) has a fully-licensed gold mine in Romania could be the biggest gold mine in Europe… an asset potentially worth $10.1 billion. And if gold edges above $1400/ounce, profits from Rovina could be even higher.
Other companies looking to capitalize on the coming gold boom…
Kinross Gold Corporation (NYSE:KGC)
While Kinross posted a significant loss in the fourth quarter of 2018, the company is making strong moves to turn around its earnings, including the hiring of a new CFO, Andrea S. Freeborough. "Andrea's successful track record at Kinross and throughout her career, including accounting, international finance, M&A, and deep management experience, will be an excellent addition to our leadership team," said Mr. Rollinson. "We have great talent at Kinross and succession planning is a key aspect of retaining that talent for the future success of our Company."
Agnico Eagle Mines Ltd (NYSE:AEM)
Canadian based gold producer, Agnico Eagle Mines is an especially noteworthy company for investors. Why? Between 1991-2010, the company paid out dividends every year. With operations in Quebec, Mexico, and Finland, the company also is taking place in exploration activities in Europe, Latin America, and the United States.
Agnico is a company with a lot of exposure to gold, letting investors take advantage of long-term price movements.
Yamana Gold (NYSE:AUY)
Yamana, has recently completed its Cerro Moro project in Argentina, giving its investors something major to look out for. The company plans to ramp up its gold production by 20% through 2019 and its silver production by a whopping 200%. Investors can expect a serious increase in free cash flow if precious metal prices remain stable.Recently, Yamana signed an agreement with Glencore and Goldcorp to develop and operate another Argentinian project, the Agua Rica. Initial analysis suggests the potential for a mine life in excess of 25 years at average annual production of approximately 236,000 tonnes (520 million pounds) of copper-equivalent metal, including the contributions of gold, molybdenum, and silver, for the first 10 years of operation.
Eldorado Gold Corp. (NYSE:EGO)
In 2018, Eldorado produced over 349,000 ounces of gold, well above its previous expectations, and is set to boost production even further in 2019. Additionally, Eldorado is planning increased cash flow and revenue growth this year.
Eldorado's President and CEO, George Burns, stated: "As a result of the team's hard work in 2018, we are well positioned to grow annual gold production to over 500,000 ounces in 2020. We expect this will allow us to generate significant free cash flow and provide us with the opportunity to consider debt retirement later this year. "
First Majestic Silver (NYSE:AG)
Though First Majestic recently took a significant blow, as a strong dollar weighed on precious metals resulting in a poor quarterly earnings report, there's still a lot of bullishness surrounding the stock. Adding to the negative numbers, however, was a string of highly valuable acquisitions which are likely to turn around for the metals giant in the mid-to-long-term.
While it's primary focus remains on silver mining, it does hold a number of gold assets, as well. Additionally, silver tends to follow gold's lead when wider markets begin to look shaky. And with analysts sounding the alarms of a global economic slowdown, both metals are likely to regain popularity among investors.
By. Charles Kennedy
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