Update: True Gold Experiences Delays At Karma

| About: True Gold (RVREF)
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Summary

True Gold just reported that it is experiencing delays at its Karma Project.

I had not anticipated this although it shouldn't be surprising to those following the unstable situation in Burkina Faso.

Fortunately the market has already priced this in, and True Gold offers compelling value with near-term catalysts.

True Gold (OTCQX:RVREF) just reported that it has had to stop some of its construction activities at its Karma Project as a result of "a disturbance in a local community." While vague, the press release is probably referring to issues arising from the recent "overthrow" of Burkina Faso's President, who resigned under significant political pressure. True Gold is reporting that in spite of these delays that the company should be able to get its Karma Project into production on time by the end of next year, with the first full year of production being 2016.

True Gold shares were relatively flat on this news on what was a very strong day for the gold mining sector, thanks to a ~$25/oz. rise in the price of gold and the fact that the gold price clearly broke above its $1,200/oz. resistance level. While this might be perceived as weakness, investors should keep in mind that the stock already fell sharply as political uncertainty escalated in Burkina Faso last month, and that it sits comfortably above its recent low. With that in mind I think the market has already priced in these issues, and assuming they don't get significantly worse I think True Gold has bottomed and it will be a strong performer as production approaches.

As I argued at the end of October a maelstrom of short-term negative factors have put significant pressure on True Gold shares in spite of the fact that it has further developed its Karma Project and in spite of the fact that the company is moving towards production, which again has not been postponed. Investors looking for quality opportunities in hopes of picking a bottom in the gold market should consider True Gold, which has been unduly punished given a rising share count, Ebola fears, and political unrest in Burkina Faso.

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The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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