Could it be possible that the cheapest penny stock of any actual gold producing exploration company is that of Gryphon Gold Corporation (GYPH). For years, everyone has been long on gold and silver and analysts are still calling for higher prices in the coming years. However, just days after filing their multi-million dollar revenues via their 10-Q and less than 12 months after transitioning from exploration to production, GYPH stock hit a new 52 week low during Tuesday’s trading session. The positive turn of events by mining gold and silver have created a negative effect on the share price which may be the bargain long prospectors are searching for.
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GYPH Stock Chart
Market Cap: 16.70M
Last: 0.086, -0.0034 (-3.80%)
Volume: 90,300
Dollar Volume: $7,069
High: 0.086
Low: 0.075 (new 52 week low)
Trades: 15
Average Trade Size: 6,020
Authorized: 500,000,000
Issued and Outstanding: 194,644,091
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Let’s retrace this penny stock back on year or so to try to see why it is that the share price reached a new low in yesterday’s trading session.
October 24, 2011, Gryphon Gold Corporation announced that it had completed its second production shipment of loaded carbon to Just Refiners, Inc. which totaled 2.7 wet tons of carbon loaded with gold and silver. Two days after the announcement, GYPH stock reached a high of 0.3523. The share price has been sliding ever since.
Noting that the second production shipment was made, three weeks later, the Company would file their 10-Q for the three months ended September 30, 2011. Within the filing, some interesting details arise:
Shares Outstanding: 193,769,882
Cash: $2,716,799
Inventories: $638,184
Total Liabilities: $10,346,398
Accumulated Deficit: $(39,338,723)
Revenues: $0 (actually, $0 for the six months ended)
So, no revenues, some cash, some inventories, $10 million in debt, and promise. Now, a year later and a couple of departures/replacements at the Board level, revenues are booming since those Q4, 2011 production deliveries began, but the share price would need to be multiplied by 5 to reach what it was last year October.
Last week, Gryphon filed their 10-Q for the three months ended September 30, 2012. From that, we take the same items of interest to compare to:
Shares Outstanding: 194,644,091
Cash: $4,534,941
Inventories: $5,610,841
Total Liabilities: $29,494,483
Accumulated Deficit: $(44,515,900)
Revenues: $3,504,293 ($9,393,656 for the six months ended)
So not only have cash and inventories nearly doubled since the same period the year before, but revenues are streaming in. Sure liabilities have increased, as did their total authorized shares from 250 million to 500 million since the same period last year, but who is they owe that money to? Waterton Global who have a vested interest in the Company executing their target of 2,000 to 2,500 oz. of gold produced every month.
For the six-month period ending September 30, 2012, $9.4 million was booked on sales of 6,037 gold equivalent ounces, compared with no revenue in the first half of fiscal 2012. Do you need to see anything more to be bullish about this oversold stock?
The Company produced 5,780 gold equivalent for the six month period, that’s less than half the target amount Gryphon plans to have the processing capability to produce 2,000 to 2,500 gold equivalent ounces per month.
About GYPH Stock
Gryphon Gold is an exploration, development and operating company focused on precious metals and is currently producing precious metals at its Borealis property, located in Nevada’s Walker Lane Gold Belt. The plan for the Borealis property is to advance production of the oxide heap leachable gold and silver. The Borealis property consists of unpatented mining claims of approximately 20 acres each, totalling about 15,020 acres, which had successful historic production.
Last 5 Trading Sessions:
| Date | Last | Change | % Change | Volume |
| 11/20/12 | 0.0860 | -0.0034 | -3.80% | 90,300 |
| 11/19/12 | 0.0894 | -0.0016 | -1.76% | 1,300 |
| 11/16/12 | 0.0910 | +0.0010 | +1.11% | 10,000 |
| 11/15/12 | 0.0900 | -0.0080 | -8.16% | 78,000 |
| 11/14/12 | 0.0980 | +0.0100 | +11.36% | 1,000 |
Click here to view the SEC filings for GYPH.
Bottom Line: I like cheap, oversold penny stocks and GYPH is definitely one of them. If you are out bargain shopping this Thanksgiving-Eve, have a look see at what your thoughts are on GYPH stock and see if you can find a reason why not to grab some cheapies.
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