Update: TrueGold's Q2 Earnings

| About: True Gold (RVREF)


TrueGold reported its Q2 earnings on Friday showing progress towards production at its flagship Karma Project.

The results were in line with my expectations - despite the loss the capital went towards developing its Karma Project.

The share price hasn't moved since I recommended the stock, and I remain bullish.

TrueGold Mining (OTCQX:RVREF) announced its second quarter results on Friday, demonstrating that it continues on the path towards production next year at its flagship Karma Project. The company reported a loss of $6.7 million, or $0.02/share, which is what one would expect for a mining company that has no production and that is working towards constructing its first mine.

Despite the loss the company reported a $27 million increase in cash/equivalents from the beginning of the year and a $26 million increase in working capital as it has been raising money. This has been dilutive - the company's share count has risen by about 50% from 265 million shares to just under 400 million shares. But this dilution along with the recent deal with Sandstorm Gold (NYSEMKT:SAND) and Franco-Nevada (NYSE:FNV) - which I discussed a couple weeks ago - mean that the company has sufficient capital to bring its Karma Project into production.

TrueGold shares remain undervalued relative to the value of this project given its current mine plan, and given the large resource that is not included in the current mine plan. I estimated that the stock has about 44% upside, and with the stock flat to slightly down since then, I continue to believe that the shares can rise 44% or more - depending on how steeply the market discounts the company's future cash-flow - from here, making TrueGold a compelling trade going into production and potentially beyond this point.

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