Ben Kramer-Miller
Gold & precious metals, macro, research analyst, deep value

Orvana Minerals: Strong Cash-Flow And 20% Undervalued

Orvana Minerals (OTCPK:ORVMF) caught my attention as one of the few small gold mining companies to generate profits in 2013. Despite this investors have been reluctant to invest in the shares, which are down 85% since peaking towards the end of 2010.

There are most likely two reasons for this underperformance. First, the company's flagship mine--El Valle-Boinas Carles (aka EVBC)--is a relatively new producer, and in its first few quarters of production costs were rather high. This never mixes well with a falling gold price. Nevertheless investors should note that costs have come down considerably, so that the mine is comfortably profitable at $1,300/ounce gold. This is evidenced by the fact that the company was able to generate...

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