NEW YORK (TheStreet) -- Shares of Almaden Minerals Ltd. (AAU - Get Report) are soaring 6.20% to $1.37 on Thursday following news its Ixtaca Gold-Silver deposit in Mexico yielded positive results on the deposit's first preliminary economic assessment or PEA.
Results of the PEA show the deposit could be economically viable and the company should proceeded to a pre-feasibility study, the company said.
Highlights from the PEA report include an estimated mine life of 12.1 years with an average processing rate of 30,000 tonnes per day, an average annual production of 130,000 ounces of gold and 7 million ounces of silver and an estimated pre-production capital of $496 million.
TheStreet Ratings team rates ALMADEN MINERALS LTD as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALMADEN MINERALS LTD (AAU) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- AAU's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.91%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 54.0% when compared to the same quarter one year prior, rising from -$1.99 million to -$0.92 million.
- ALMADEN MINERALS LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ALMADEN MINERALS LTD swung to a loss, reporting -$0.17 versus $0.12 in the prior year.
- AAU has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 22.30, which clearly demonstrates the ability to cover short-term cash needs.
- You can view the full analysis from the report here: AAU Ratings Report