Monday, June 25, 2012

Brigus Gold Corp BRD Gold Penny Stock

One penny stock I recently added to my portfolio is a gold exploration penny stock. One of my favorite shows to watch on the Discovery channel was Gold Rush. This show was about several miners who had no mining experience and decided one day they were going to Alaska to mine for gold. The show caught my interest, although I am in no position to quit my job and move to Alaska anytime soon I decided I wanted to own a gold company of my own.



Brigus Gold Corp (BRD)
Recent price: $0.85
52 week range: 0.69 - 1.99
Market cap: 184.7 mil
My purchase price: $0.78


Overview
This penny stock's main focus is the exploration of gold. Their main site is in Canada at the Black Fox Mine known for its rich gold deposits. The company believes they can operate very profitable from this location for years to come. They approximate around 1.86 million ounces in reserves with gold prices currently at $1,585 an ounce would equate to $2.95 billion in revenue.


Financials

 















Although this penny stock has not had significant revenue growth over the past few years I am more interested in consistency at this point and improved margins.






As you can see from 2007 to the end of 2011 this gold penny stock has significantly increased their net margins from 5.26 to 22.22%.




 

 This chart shows how this gold penny stock has increased their assets at the same time widening the gap from liabilities. Less debt on their balance sheet reduces their borrowing costs which will help with their bottom line earnings and cash flow.

Investment Rationale
I am well aware of the risk associated with this investment; the reason I bought this particular gold penny stock and not other ones that I had recently researched was the fact they are running a profitable operation that appears will continue to run profitably for the foreseeable future. They will also continue to benefit from high gold costs even though they are off of their highs, the climate is still very beneficial for BRD's exploration.


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