It’s been a volatile couple of months for most gold producers as the correction in the price of gold (GLD) has taken a bite out of many miners’ share prices. Great Panther Mining (NYSEMKT:GPL) is one of the names that has run into some selling pressure with the stock correcting 25% from its August highs. While this has likely left some investors that overpaid for the stock frustrated, the good news is that the stock just came off another solid quarter, with quarterly production of 39,800~ gold-equivalent ounces (GEOs). Given the higher metals prices and improved operations this year, we’ve seen analysts pull their earnings estimates higher, with FY2021 annual EPS estimates now sitting at $0.21. While I see more attractive producers elsewhere in the sector, I see Great Panther as a Speculative Buy at $0.72, given its very reasonable valuation.
(Source: Company Website)
Great Panther Mining released its preliminary Q3 production results last week and reported quarterly production of 39,800~ GEOs, a 3% increase from the 38,500~ GEOs produced last quarter. The company’s flagship Tucano Mine has now produced 93,400 ounces of gold year-to-date, and the mine remains on track to meet its FY2020 production guidance midpoint of 125,000 ounces. While the share price has been under pressure recently due to the sector-wide slump, it’s worth noting that Great Panther has only gotten more attractive as earnings estimates have continued to climb over the past two months. Based on current estimates of $0.21 for FY2021, the stock is trading at just below 5x FY2021 annual EPS estimates. Let’s take a closer look at the most recent quarter below:
(Source: Company News Release)
Beginning with the company’s Tucano Mine in Brazil, it was a relatively soft quarter, with gold production coming in at 31,800~ ounces vs. 35,400~ ounces