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My best idea for 2020 is Teranga Gold. Teranga is a small cap producer with one mine in Senegal and a start up project in Burkina Faso which is going well.
The real juice in the Teranga story is in its recent acquisition of an undeveloped deposit in Senegal from Barrick gold called Massawa. When this deal closes, Teranga will be able to process Massawa ore through its current operating plant. Massawa is much higher grade than the ore which Teranga is processing through its plant currently. This means that when Teranga starts to process Massawa ore through its plant, it will be able to produce more gold over the same fixed cost base. This will result in a large increase in production from the mine and a large reduction in unit costs as production grows. All of this should be done with minimal capital expenditures.
If successful in executing this plan, and if its new mine in Burkina Faso has a successful startup, the company will go from producing roughly 220,000 ounces in 2019 to near 500,000 ounces in 2021. At these levels, the company will be producing large amounts of fee cash flow.
I think that the stock will move higher, and could conceivably double over this period assuming a flat gold price.
