Cheap gold company stocks

Gold miners Rand Mining and Tribune Mining are currently tipped to be the Australia’s best-value gold stocks.

Yet many have not even heard of the companies.

SMH today reported the stocks are “screaming ’buy' on every metric”.

In the past six months Rand and Tribune's inventory has risen from $137 million to $170 million in December, the companies have low debt, locked-in gold production and exploration potential.

The current combined market value is $85 million: Tribune ($66 million) and Rand ($19 million) equates to half of their gold holding.

The two have also earned $16 million net profit and increased gold inventory by roughly 17,000 ounces.

At current gold prices this is an extra $25.5 million pre-tax, for the half-year alone.

Chief executive of Rand Mining and Tribune Mining, Anthony Billis modestly said on Saturday that “the market is the best barometer of value”.

Tribune owns 44 per cent of Rand and Rand owns 23 per cent of Tribune.

Together, the two are also 49 per cent partners in the East Kundana Joint Venture, Barrick Gold, the world's second-largest gold company, holds the other 51 per cent.

Located outside of Western Australia's Kalgoorlie, East Kundana produces gold at 12 grams per tonne and according to the SMH per ounce it is one of the most profitable gold mines in Australia.

It has also been reported East Kundana could soon announce another resource upgrade.

“'The drilling has increased the known economic mineralisation down dip below the currently optimised pit by 300 metres and has increased the strike length to greater than 600 metres. The drilling has also identified that the K2K structure can also host a considerable quantity of gold,'' a Barrick Gold ASX announcement in September stated.

The is one caveat, Rand and Tribune have a number of mysterious shareholdings held offshore which can cause headaches for regulators and investors.

''Rand has been granted an option to acquire all of the issued share capital in Iron Resources Ltd, a wholly owned subsidiary of Resource Capital Ltd from Resource Capital.

''IRL is the registered holder of a mineral exploration licence over a 600k area in Northern-Central Liberia,'' the company’s ASX announcement disclosed.

When SMH asked who was behind this opportunity Billis said, ''I can't comment on that''.

The reason the identity of Resource Capital may be of interest to shareholders is that if this deal was to go ahead it could significantly dilute them.

Billis is a director of Resource Capital but not a shareholder and would not disclose who the shareholders were, nor would he confirm if any of his associates were shareholders.

If this deal was to be completed the unnamed shareholders would acquire a lot of gold and also have the ability to produce even more through the East Kundana project.

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