METALS EXPLORATION, A PROMISING MINER?

INTRODUCTION

Metals Exploration is a mining company based in the Philippines. The company focuses on decreasing operating cost in its mining operations to improve margins. The company was founded in 2004, and has since been listed on the London Stock Exchange. The company continues to acquire mines and enters into joint venture partnerships in order to increase its portfolio size and capacity to mine. The company’s stock recently appreciated 154% on the back of a strong performance. The company recently purchased a gold mine with around 16,000 hectares of gold rich area in the Philippines. The recent acquisition could be important for the company and could enable the company to capitalize on the rising gold prices. Metals Exploration could present an interesting opportunity to buy into shares.

ANALYSTS SUGGEST UNDERVALUATION OF METALS EXPLORATION

According to recent reports, analysts are suggesting that the Metal Exploration company is undervalued by some 76% based on fundamental valuations. Earnings of the company have grown sharply, with Metals Exploration generating an increase of 68%, well above the industry average. The company has managed to maintain solid growth, and this has been reflected in the recent spike in pricing, although given its undervaluation, the positive momentum could drive the stock price even higher.

DEMAND FOR GOLD CONTINUES TO REMAIN SIGNIFICANT

With global geopolitics tense, economic uncertainty is at the forefront of investors’ minds, with most looking for a safe haven asset to hold. With the US dollar also expected to weaken later in the year as the Federal Reserve cuts interest rates, gold prices are expected to continue moving higher. Additionally, central banks continue to horde gold, with buying momentum unabated since 2010. In combination, these factors could continue to drive gold prices in the medium to long term, which would facilitate higher sales prices for Metals Exploration. Ultimately, this would improve the company’s financial performance and could lead to further gains.

CONCLUSION/SUMMARY

In conclusion, Metals Exploration has performed extremely well in recent periods and seems poised to continue doing so. Acquisitions of large gold mines, along with strong gold demand create a strong combination for the company to capitalize on and continue to increase value. Given the optimistic outlook for the company in the medium to long term, this could be one of the good penny stocks to buy now.