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Editor’s Note: This article covers stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

In this article, I will feature one gold stock 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%.

True Gold Mining (OTCQX:RVREF) engages in the acquisition, exploration, and development of mineral resource properties in Burkina Faso, West Africa.

(click to enlarge)

Insider buying during the last 30 days

Here is a table of True Gold's insider-trading activity during the last 30 days.

NameTitleTrade DateShares PurchasedCurrent OwnershipIncrease In Shares
Rick BailesDirectorFeb 18200,0001,429,000 shares+16.3%
Scott HeffernanVPFeb 1850,00050,000 sharesfrom 0 to 50,000
Dwayne MelroseCEOFeb 1850,000397,500 shares+14.4%
Robin MerrifieldDirectorFeb 18100,000220,000 shares+83.3%
Mark O'DeaExecutive ChairmanFeb 18500,0009,592,597 shares+5.5%
Rodrigo RomoCorporate SecretaryFeb 1820,00020,000 sharesfrom 0 to 20,000
Teck Resources (NYSE:TCK)10% OwnerFeb 1813,493,41745,546,447 shares+42.1%
Liberty Metals & Mining Holdings10% OwnerFeb 1824,769,39477,524,642 shares+47.0%

There have been 39,182,811 shares purchased by insiders during the last 30 days. All these shares were purchased pursuant to a bought deal offering.

Insider buying by calendar month

Here is a table of True Gold's insider-trading activity by calendar month.

Month

Insider buying / shares

Insider selling / shares

February 201439,182,8110
January 2014142,00087,000
December 2013118,0000
November 201300
October 201300
September 2013101,0000
August 2013200,0000
July 201352,755,2480
June 201300

May 2013

20,000

0

April 2013

447,803

0

March 2013

2,000

0

February 2013

0

36,500

January 2013

0

0

There have been 92,968,862 shares purchased, and there have been 123,500 shares sold by insiders since January 2013.

Financials

True Gold reported the third-quarter financial results on November 25 with the following highlights:

Revenue$0
Net loss$7.8 million
Cash$30.7 million

On February 18, True Gold closed a $51.9 million financing.

Upcoming milestones

True Gold's upcoming milestones include the following.

(click to enlarge)

(Source: Investor presentation)

Competition

True Gold's competitors in Africa include Banro (NYSEMKT:BAA), and Golden Star Resources (NYSEMKT:GSS). Here is a table comparing these companies.

CompanyRVREFBAAGSS
Market Cap:130.48M154.03M201.22M
Employees:N/A2,0742,000
Qtrly Rev Growth (yoy):N/A2.12-0.12
Revenue:N/A118.72M521.47M
Gross Margin:N/A0.450.18
EBITDA:-5.97M37.32M72.36M
Operating Margin:N/A0.10-0.03
Net Income:-13.10M5.42M-119.66M
EPS:-0.110.02-0.46
P/E:N/A25.46N/A
PEG (5 yr expected):N/AN/A-1.60
P/S:N/A1.300.40

True Gold doesn't have any revenues yet. True Gold's market cap has been adjusted to the February offering. True Gold sold 105,110,000 shares at the offering. As of February 22, True Gold had 372,800,834 shares outstanding, which gives the company a market cap of $130.48 million.

Here is a table of these competitors' insider-trading activities since January 2013.

CompanyInsider buying / sharesInsider selling / shares
BAA470,000330,000
GSS62,0000

Only True Gold has seen intensive insider buying during the last 30 days.

Conclusion

There have been eight different insiders buying True Gold, and there have not been any insiders selling True Gold during the last 30 days. Seven of these eight insiders increased their holdings by more than 10%.

(click to enlarge)

(Source: Investor presentation)

The insiders purchased their shares at $0.35 (C$0.39) in the February offering. I believe the stock could be a good pick at $0.35 based on the intensive insider buying.

(click to enlarge)

(Source: Investor presentation)

Source: True Gold: 8 Different Insiders Have Purchased Shares This Month