Insiders Are Buying Romarco Minerals

Nov.18.13 | About: Romarco Minerals (RTRAF)

(Editors' Note: This article covers a micro-cap stock. Please be aware of the risks associated with these stocks.)

In this article, I will feature one gold mining company that has 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 increased their holdings by more than 10%.

Romarco Minerals (OTCPK:RTRAF) engages in the acquisition, exploration, and development of precious metals mineral properties in the United States.

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Insider buying during the last 30 days

Here is a table of Romarco Minerals' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Public Offering Current Ownership Increase In Shares
Diane Garrett CEO Nov 13 285,714 Yes 1,853,714 shares +18.2%
Leendert Krol Chairman Nov 13 214,286 Yes 739,286 shares +40.8%
Stanton Rideout CFO Nov 13 142,857 Yes 142,857 shares from 0 to 142,857
Gary Sugar Director Nov 13 150,000 Yes 150,000 shares from 0 to 150,000
Robert van Doorn Director Nov 13 150,000 Yes 950,000 shares +18.8%
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There have been 942,857 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Romarco Minerals' insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
November 2013 942,857 0
October 2013 0 0
September 2013 0 0
August 2013 0 0
July 2013 75,000 0
June 2013 0 0
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There have been 1,017,857 shares purchased and there have been zero shares sold by insiders since June 2013. The month of November has seen the most insider buying.

Financials

Romarco Minerals reported the third-quarter financial results on November 6 with the following highlights:

Revenue $0
Net loss $3.9 million
Cash $32.7 million
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On November 13, 2013, Romarco Minerals closed a $25 million financing.

Outlook

Romarco Minerals' Haile Gold project has the following upcoming milestones:

Milestone Timing
Draft EIS publication March 2014
Draft EIS public hearing April 2014
Final EIS publication July 2014
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(Source: Investor presentation)

Competition

Romarco Minerals' competitors include Brigus Gold (BRD), and Paramount Gold and Silver (NYSEMKT:PZG). Here is a table comparing these companies.

Company RTRAF BRD PZG
Market Cap: 230.04M 157.45M 186.88M
Production: No Yes No
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Only Brigus Gold is currently producing gold.

Here is a table of these competitors' insider-trading activities during the last six months.

Company Insider buying / shares Insider selling / shares
BRD 181,832 0
PZG 42,000 25,000
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Only Romarco Minerals has seen intensive insider buying during the last 30 days.

Conclusion

There have been five different insiders buying Romarco Minerals and there have not been any insiders selling Romarco Minerals during the last 30 days. All five of these insiders increased their holdings by more than 10%.

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(Source: Investor presentation)

Romarco Minerals' Haile Gold project has a pre-tax NPV (5%) of $693 million at $1,300 gold price. There are four analyst buy ratings, two neutral ratings, and zero sell ratings with an average price target of $0.86. I believe the stock could be a good pick from the current price level based on the intensive insider buying.

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(Source: Investor presentation)

Disclosure: I am long BRD, PZG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.