I’ve been watching US Gold Corporation (NYSE:UXG) and I believe it might be time to start building a small conservative position in the company. UXG is run by Robert McEwen, the highly regarded former CEO of GoldCorp (NYSE:GG). UXG has 50.06 million shares outstanding. Mr. McEwen owns 11,100,000 shares or a little over 22% of all the shares outstanding. This is something I really like to see.
Mr. McEwen has a high incentive to create shareholder value. His fortune in UXG isn’t pegged to a salary, but rather the performance of the company’s shares. This is outstanding news for shareholders betting on Mr. McEwen’s leadership abilities. Other positive statistics about the company include nearly $51 Million in cash and almost no debt. UXG’s cash position amounts to a little over $1 a share.
If investors look at UXG, what are they really buying? UXG is still a Microcap company that is a speculative play. From my brief initial research the company is still in exploration mode. This is the riskiest part of the mining cycle, but also rewards investors with the highest returns.
UXG will be on my shortlist of stocks to consider adding a decent sized position in once the company starts announcing drilling results from the properties it controls. A small conservative position may offer some tremendous upside using a low percentage allocation of your gold equities portfolio.
UXG 1-yr chart