Gold Miner! Seriously??? PE 1.7 - Gran Colombia Gold Stock Analysis

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The major mine is in Colombia, yet they have projects now in Canada, Spain and Guyana.

I think that Gran Colombia, because it is not a fully fledged diversified Major, gives investors an opportunity to get a money printing machine for cheap.

Growth Plans

Now, this might sound strange, but Gran Colombia is a Spawner. A spawner is something Mohnish Pabrai, my favorite investor, recently made popular and is a company that is spawning out new projects and new businesses. Think Google, Alibaba, Tencent and Amazon with all their different projects. Well I think Gran Colombia is also a spawner.

Gran Colombia’s Spawned Children
45% stake in Aris Gold - Market value approx $170 Million
Had 18% and now about to acquire 100% of Gold X - Market value approx $200 Million
Stake in Denarius Silver - Market value approx $14 Million
Stake in Atlas resources - Market value approx $2 million

The Gold X expansion.
Gran Colombia is acquiring Gold X, which is a mine site in Guyana (another South American country for those not familiar).
The cool thing about this project is that there are over 7 million ounces of gold measured in the feasibility study, with potential for another 3 million ounces.

The major shareholder and executive director of the company, Serafino Iacono, said multiple times that “We can take our production to 400,000 ounces a year fairly easily.”
With strong gold prices, this would be a big time money printing machine.

Competition - Gran Columbia

So competitive advantage comes from size of the reserves, costs of production and ability to survive when gold prices are depressed.
So we would need a good balance sheet, as one of the most important things. But whichever mining company holds the rights to mine on a particular piece of land, well they get to control. So a good reserve is a competitive advantage.

Gran Colombia does have a location competitive advantage. For a company to be operating for many years in a country like Columbia, they have extensive experience with the government, the locals and the regulations. This makes it very difficult for another company that doesn’t have Colombia experience to come in and compete.

Gran Colombia is 3 times bigger than the next biggest Colombian gold mining company, giving them a big advantage.

Management

Firstly, I want to see management alignment. Serefino Iacono does own about 3% of the company at about 9 million dollars. And his compensation is about $1M, which is high, but his net worth is tied to the fortunes of the company. This is a good start.
The company has also issued a monthly dividend that is about 3% yield right now. This is to try and encourage more investors to find the company. They want this dividend to be long term and sustainable, which I think is a good tactic to try and get investors to be interested.

Opinion

So what do you think? Do you like this company?

I’ll be following Gran Colombia from now on, so make sure to subscribe so you don’t miss my future updates.
Hit the like button if you got something out of this and I’ll see you in the next video.

Видео Gold Miner! Seriously??? PE 1.7 - Gran Colombia Gold Stock Analysis канала Andrew Brown