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The Market Vectors Gold Miners ETF (GDX) was trading as high as $66.98 in September 2011. The index is currently trading at $23.22, or 65.3% below the September 2011 peak.

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In this article, I will feature two gold miners that have seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.

  2. The stock is sold by no insiders in the month of intensive purchasing.

  3. At least two purchasers increase their holdings by more than 10%.

1. AuRico Gold (AUQ) operates as a gold producer with mines and projects in North America.

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Insider buying by insider (last 30 days)

  • Christopher Bostwick purchased 2,607 shares on July 8 pursuant to a purchase/ownership plan. Christopher Bostwick currently holds 32,018 shares or less than 0.1% of the company. Christopher Bostwick is AuRico's Senior Vice President, Technical Services.
  • Robert Chausse purchased 3,333 shares on July 8 pursuant to a purchase/ownership plan. Robert Chausse currently holds 18,451 shares or less than 0.1% of the company. Robert Chausse is Executive Vice President & Chief Financial Officer.
  • Luis Chavez purchased 2,592 shares on July 8 pursuant to a purchase/ownership plan. Luis Chavez currently holds 54,218 shares or less than 0.1% of the company. Luis Chavez serves as a director of the company.
  • Richard Colterjohn purchased 890 shares on July 8 pursuant to a purchase/ownership plan. Richard Colterjohn currently holds 250,890 shares or 0.1% of the company. Richard Colterjohn serves as a director of the company.
  • Mark Daniel purchased 940 shares on July 8 pursuant to a purchase/ownership plan. Mark Daniel currently holds 10,623 shares or less than 0.1% of the company. Mark Daniel serves as a director of the company.
  • Anne Day purchased 1,790 shares on July 8 pursuant to a purchase/ownership plan. Anne Day currently holds 15,285 shares or less than 0.1% of the company. Anne Day is AuRico's Vice President of Investor Relations and Communications.
  • Patrick Downey purchased 791 shares on July 8 pursuant to a purchase/ownership plan. Patrick Downey currently holds 13,416 shares or less than 0.1% of the company. Patrick Downey serves as a director of the company.
  • Alan Edwards purchased 890 shares on July 8 pursuant to a purchase/ownership plan. Alan Edwards currently holds 31,710 shares or less than 0.1% of the company. Alan Edwards serves as a director of the company.
  • Peter MacPhail purchased 3,333 shares on July 8 pursuant to a purchase/ownership plan. Peter MacPhail currently holds 42,988 shares or less than 0.1% of the company. Peter MacPhail is AuRico's Executive Vice President & Chief Operating Officer.
  • Trent Mell purchased 3,333 shares on July 8 pursuant to a purchase/ownership plan. Trent Mell currently holds 34,467 shares or less than 0.1% of the company. Trent Mell is AuRico's Executive Vice President, Corporate Affairs.
  • Charlene Milner purchased 2,009 shares on July 8 pursuant to a purchase/ownership plan. Charlene Milner currently holds 9,604 shares or less than 0.1% of the company. Charlene Milner joined the company in January 2008 as the Director of Financial Reporting, and was appointed Vice President, Finance in October 2011.
  • Christopher Richter purchased 2,055 shares on July 8 pursuant to a purchase/ownership plan. Christopher Richter currently holds 26,248 shares or less than 0.1% of the company. Christopher Richter is AuRico's Senior Vice President, Corporate Development.
  • Christopher Rockingham purchased 2,356 shares on July 8 pursuant to a purchase/ownership plan. Christopher Rockingham currently holds 40,927 shares or less than 0.1% of the company. Christopher Rockingham is AuRico's Vice President, Exploration & Business Development.
  • Ronald Smith purchased 1,275 shares on July 8 pursuant to a purchase/ownership plan. Ronald Smith currently holds 8,039 shares or less than 0.1% of the company. Ronald Smith serves as a director of the company.
  • Joseph Spiteri purchased 742 shares on July 8 pursuant to a purchase/ownership plan. Joseph Spiteri currently holds 11,176 shares or less than 0.1% of the company. Joseph Spiteri serves as a director of the company.

Insider buying by calendar month

Here is a table of AuRico's insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
July 201328,9360
June 201300
May 201320,0000
April 201325,9910
March 201315,0000
February 2013111,625186,500
January 201315,2780

There have been 216,830 shares purchased and there have been 186,500 shares sold by the insiders this year.

Financials

The company reported the first-quarter financial results on May 9 with the following highlights:

Revenue$64.9 million
Net income$18.3 million
Cash$269.2 million
Debt$171.8 million
Gold production46,170 ounces
Cash costs$635 per ounce
All-in cash costs$985 per ounce

After deducting capital expenditures of $45.5 million, including capital expenditures of $34.4 million at the Young-Davidson mine, the company's Q1 2013 net free cash flow from continuing operations was negative $32.4 million.

Outlook

The company's guidance for 2013 is as follows:

Gold production (ounces)190,000-220,000
Cash costs per ounce$565-$645
All-in cash costs per ounce$1,100-$1,200

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The company expects capital expenditures to exceed operating cash flows in 2013 due to pre-production development expenditures relating to the Young-Davidson underground mine, as well as capital expenditures on the paste backfill plant at Young-Davidson. The company intends to fund this forecasted shortfall using cash on hand and, if necessary, the current capacity available under its credit facility.

Competition

Competition in the precious metals mining industry is primarily for:

  1. mineral properties that can be developed and produced economically.
  2. technical expertise that can find, develop, and mine such properties.
  3. labor to operate the properties.
  4. capital to finance operations.

AuRico competes with other mining and exploration companies in the acquisition of mining claims and leases and in connection with the recruitment and retention of qualified employees. There is significant competition for mining claims and leases.

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My analysis

There have been 15 different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. There are three analyst buy ratings, seven neutral ratings and one sell rating with an average target price of $5.99. The company's proven and probable gold reserves are 6.8 million ounces. The stock is trading at a P/E ratio of 27.98 and a forward P/E ratio of 13.82. The company has a book value of $8.14 per share and the stock has a dividend yield of 3.51%. I believe the stock could be a good pick below the book value.

2. Thompson Creek Metals Company (TC) is a growing, diversified North American mining company. Thompson Creek has two large operating molybdenum mines, a large copper-gold mine under construction, a stand-alone metals roasting facility, and a number of additional metals properties in various stages of development. All operations are located in the United States or Canada.

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Insider buying by insider (last 30 days)

  • Wendy Cassity purchased 2,799 shares on July 3 pursuant to a purchase/ownership plan. Wendy Cassity currently holds 13,470 shares or less than 0.1% of the company. Wendy Cassity was appointed Vice President, General Counsel and Secretary of the company in September 2010.
  • Christopher Gibbs purchased 6,024 shares on July 3 pursuant to a purchase/ownership plan. Christopher Gibbs currently holds 6,024 shares or less than 0.1% of the company. Christopher Gibbs joined the company as Vice President, Human Resources and Administration on June 25, 2012.
  • Mark Wilson purchased 5,524 shares on July 3 pursuant to a purchase/ownership plan. Mark Wilson currently holds 18,180 shares or less than 0.1% of the company. Mark Wilson is Executive Vice President and Chief Commercial Officer.

Insider buying by calendar month

Here is a table of Thompson Creek Metals Company's insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
July 201314,3470
June 201300
May 201300
April 201300
March 20131,9000
February 20133,0000
January 201300

There have been 19,247 shares purchased and there have been zero shares sold by the insiders this year.

Financials

The company reported the first-quarter financial results on May 8 with the following highlights:

Revenue$108.7 million
Net income$0.9 million
Cash$469.3 million
Debt$1.0 billion

Outlook

The company is currently estimating an aggregate of approximately $1.5 billion to construct and develop the Mt. Milligan copper-gold mine of which approximately $240.0 million of expenditures remain to be spent, plus an additional $40.0 million to $50.0 million of estimated future cash capital expenditures for a permanent operations residence at Mt. Milligan, which is expected to be completed in 2014. Mt. Milligan's average annual production is expected to be higher during the first full 6 years of production (approximately 89 million pounds of copper and 262,000 ounces of gold in concentrate), compared to annual life-of-mine production. The company will provide production and cash cost guidance for 2014 once Mt. Milligan is fully operational.

My analysis

There have been three different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. The company has an insider ownership of 15.89%. The Mt. Milligan project remains on schedule, with commissioning and start-up expected to commence in August of 2013, and commercial production of copper and gold expected in the fourth quarter of 2013. The company has the necessary financing to start the mine.

There are five analyst buy ratings, three neutral ratings and one sell rating with an average target price of $4.12. The stock is trading at a forward P/E ratio of 3.85 and the company has a book value of $8.12 per share. I have a long position in the stock currently.

Source: 2 Gold Miners With Recent Intensive Insider Buying