Alacer Gold: Take Advantage of Cheap Gold in Turkey
Investors have generally been afraid of investing in Turkey over the past year or so due to high inflation and political upheaval. As a result, the Turkish stock market has lost around half of its value in dollar terms.
Towards the end of January, I suggested that investors bite the bullet and make a contrarian bet on Turkey. While the market hasn’t soared, Turkish stocks seem to have found a bottom just a couple days after my article was published. I think there is still opportunity in Turkey. Here, I want to highlight one company in particular. While it is headquartered in the United States and primarily traded in Canada, Alacer Gold (OTCMKTS:ALIAF) is a Turkish gold miner. It owns 80 percent of the Copler mine in Turkey and it owns several exploration properties in Turkey. Furthermore, it recently sold the last of its Australian properties, making it purely a Turkish gold miner.
This has made Alacer Gold shares incredibly inexpensive because investors are afraid to invest in Turkey. While there is risk in mining in Turkey there is substantial reward potential, especially if you believe that the gold price is going to rise.
Alacer Gold trades with a $786 million market capitalization. However, it had $222 million in cash. It probably has more today given that it sold its Australian assets for $40 million Australian (about $35 million U. S.), and it operates the highly profitable Copler mine, which probably generated about $20 million in cash flow despite the weak gold price. Thus, the company has closer to $275 million or $280 million in cash. It also has no debt.