I have selected…[the following 2 companies] as the best risk/reward gold producers [at the present time]. ..[Their stocks] should outperform the price of gold significantly - if it rises. In fact, I expect these stocks to double in value if gold reaches…[$2,500]…

This version of the original article, by Don Durrett, has been edited* here by munKNEE.com for length (?) and clarity ([ ]) to provide a fast & easy read. Visit our Facebook page for all the latest - and best - financial articles!

[Both] these stocks have high leverage versus the gold price, so they also have high risk. In fact, I would say that they are both currently underperforming. If gold prices drop, they will likely fall hard…

Below is an analysis from…[my] website…for each stock on the list….

Argonaut Gold (AR:TSE)

Argonaut Gold is a solid mid-tier producer. There is a lot to like about this company…Anyone who analyzes gold mining stocks has to be impressed with this stock. They have executed like pros.

• They now have 8 million oz. of M&I and excellent exploration potential.
• The only question to ask is how big is this company going to get. My guess is that they will continue to buy projects and build mines.
• With an FD market cap of $333 million, the upside potential is significant. My only concern is that they get taken out by a larger company, or perhaps have troubles in Mexico.
• The biggest issue is they don't have a lot of cash…plus, they tend to grow slowly from their conservative approach…
• [Assuming] they will reach 300,000 oz. of annual production, all-in costs will be $1,100 per oz., and future gold prices will reach $2,500, its potential future market cap growth rate is 800% and, with such a potential increase, it is highly undervalued.
• [For more specific details please refer to the original article here.]

…Is this a good entry point? Yes, with their future reserves currently valued at $27 per oz., they are very cheap, although, you may want to be patient and wait for a better entry price…

Teranga Gold (TGZ:TSE)

Teranga Gold is a mid-tier producer in West Africa (Senegal).

• Their Sabodala project is a large (4.4 million oz.) open pit project.
• Cash costs are projected to be around $650 per oz. in 2018, with all-in costs around $1,000 per oz.
• They are currently building their second mine (Wahgnion), which is a 2.4 million oz. open pit project with low-cash costs.
• Their production should increase over of the next few years from 230,000 oz. in 2018 to 350,000 oz. in 2020.
• Currently, their FD market cap is $353 million, so they are super cheap.
• [Assuming] they will reach annual production of $350,000 oz., all-in costs will be $1,100 per oz., and future gold prices will reach $2,500, its potential future market cap growth rate is 700% and, with such a potential increase, it is highly undervalued.
• The key for them is going to be production growth beyond 350,000 oz.
• If gold prices rise, they should have enough cash flow to acquire another company.
• The only red flag for them is the locations of their mines in West Africa.
• [For more specific details please refer to the original article here.]

…Is this a good entry point? Yes, [this is a]potential high return stock, although it would be nice to buy it at $250 million. You may want to be patient and wait for a better entry price…

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(*The author's views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)

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