Bearish Mining Sector Presents Good Entry Point for Investors

Three Small-Cap Mining Plays

Three Small-Cap Mining Plays

Three Small-Cap Mining Plays

Alderon Iron Ore Corp. (NYSE: AXX) closed down in trading on Monday. Trading in shares of Alderon opened at $1.75 and traded between a high to low range of $1.51 to $1.80. The company is trading below its 52 week high of $3.83 per share. The company’s recent strategic partnership with Hebei Iron and Steel Group Co., Ltd (SHE: 000709) should give a boost to current share valuations. Alderon is a Vancouver, British Columbia, based exploration-stage company that develops mineral resource properties. The company market capitalization is around $214 million. On its income statement for the quarter ending September 30, 2012, the company reported a net income loss of $25.98 million on revenues of $0. Fully diluted earnings per share for the company were -$0.24 for the same quarter.

PolyMet Mining Corp. (NYSE: PLM) traded lower, down 2.52 percent at $1.16 per share. The company’s stock is trading below its 52 week high of $1.16, opening the day’s trading at $1.15. The company reported net income of negative $1.25 million in the quarter ending October 31, 2012, on $0 revenues for the quarter. PolyMet Mining Corp. has a market capitalization of $212.02 million. PolyMet, based in Richmond, British Columbia, is a development-stage natural resources company. The company has a current ratio of 2.68 and debt to equity ratio of 23 percent, placing it in a fundamentally sound financial position.

Augusta Resource Corp. (NYSE: AZC) traded lower, finishing up 1.13 percent to close at $2.62 per share. The company is trading just below its 52 week high of $3.13. The market capitalization for AZC is $377.50 million. The company reported net income of -$2.12 million in the quarter ending September 30, 2012, on $0 in total revenues. Augusta Resource Corp. is a Vancouver, British Columbia, Canada based natural mineral resource properties company. Shares opened on Monday at $2.60 per share and traded in the range of $2.55 to $2.72. The company has a current ratio of 2.49 and debt to equity 24 percent.

Despite trading down in Monday’s session, Alderon Iron Ore Corp should benefit greatly from the strategic partnership as it moves to increase its market share. Shares of Alderon traded down by 7.88 percent closing at $1.52.

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  1. DanSlone
    Mar 29, 2013 - 03:49 PM

    Personally I would like to see some revenue history on Alderon and PolyMet before making an investment decision. Partnership with a Chinese firm offers only so much reassurance given the massive oversupply of construction in the Chinese market, much of it supported by shadow subsidization by the national and local governments. At some point that bubble is going to burst, especially if another economic downturn that depresses Chinese exports takes place.

    Reply
  2. Brian Prescott
    Mar 30, 2013 - 01:26 PM

    Alderon Iron Ore is an interesting find although I’d spend some time monitoring the company. I wouldn’t read too much in the partnership with Hebei Iron and Steel but rather look more favorably at the steady improvement in US factory output.

    Reply
  3. Khangelani Hlongwane
    konraad
    Mar 31, 2013 - 01:58 PM

    debt to equity ratio of 23 is very impressive, this shows that they have a hand on their finances, but the revenues don’t seem pleasing

    Reply
  4. Lillie
    Apr 02, 2013 - 09:07 PM

    AXX is still going down…Beta is too high for my blood.

    Reply
  5. Tyokunbo Abiola
    Tyokunbo
    Apr 12, 2013 - 02:26 PM

    The stock is below the 200-day. I have concerns about its long term prospect.

    Reply

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