By: Dylan Sikes - AllPennyStocks.com News

Thursday, April 25, 2013

Metal miners, especially gold miners, have been mercilessly crushed in recent months as the price for spot gold accelerated a multi-month decline to hit its lowest level since March 2011. Last week, gold took a historic beating, including a 9.3 percent nosedive on Monday that weighed-in as the single biggest one-day percentage drop for bullion since February 1983. The reason? Because the gross domestic product report from China for the first quarter of 2013 only showed 7.7 percent growth, compared to the 8.0 percent that economists expected. Many analysts and firms have now jumped on the bear bandwagon for gold, including Goldman Sachs last week lowering its 2013 gold forecast to a price target of $1,545 per troy ounce.

A decrease in the value of miners is one thing, but the bear run seems to have perhaps devalued some majors and juniors beyond justification. Since highs in September of $46.31, shares of Goldcorp (TSX:G) fell last week to be down more than 40 percent. Barrick Gold (TSX:ABX) certainly has plenty of issues at hand, but its shares in the same time have jettisoned almost 60 percent. Traders can throw a dart and pretty much hit a junior listed on the Venture that has lost a good chunk of its value.

Vancouver’s Endeavour Mining Corp. (TSX:EDV) (OTCQX:EDVMF) is another stock that has taken a lashing. Shares were trading as high as $2.56 in October, but have subsequently dropped to as low as 84 cents last week, a 67-percent drop in value.

Endeavour has three producing gold mines in Ghana, Mali and Burkina Faso that cumulatively are producing more than 300,000 ounces per year.

In 2012, the company produced 220,462 ounces of gold, which included 75 days of production at its Tabakoto Mine that was acquired in October. Full-year production in 2013 should easily surpass 300,000, based on 2012 production at Tabakoto. Nearly all the produced gold was sold, generating a mine cash margin of $179 million. Adjusted net earnings were $35.8 million, or 13 cents per share in 2012. The year ended with Endeavour having $105.9 million in cash and cash equivalents and 27,000 ounces (worth about $45 million) on hand.

Endeavour has been re-investing its cash into opening a fourth mine, the Agbaou gold mine in Côte d'Ivoire, “the Ivory Coast” country to the southwest of Burkina Faso, Africa. According to Wednesday’s corporate news, the mine is about 57 percent physically complete and on schedule to begin production in the first quarter of 2014. A 2012 NI 43-101 compliant report showed the property to have a Measured and Indicated resource of 1.157 million ounces comprised of 14.970 million tonnes at 2.43 g/t (at 0.5 g/t cut-off).

Endeavour, according to the report, expects to produce more than 100,000 ounces of gold annually from Agbaou. An updated technical report is anticipated during this quarter.

Apparently, yesterday’s news was the jolt that shares of EDV needed. Rising from the depths of the lows last week, shares perked more that 23 percent in Wednesday action, to close the day at $1.06. Today the stock is continuing its rise as shares are up another $0.03 to $1.09 a share by mid-day trading.

For a company that could produce 500,000 ounces of gold in 2014 (or at least a minimum of 400,000), it would not be unfathomable to wonder if this is one of those companies that has been over-punished because of a tainted view towards gold at the moment. Proper due diligence is, as always, encouraged.

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