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Goldgroup Mining's Recent Caballo Blanco Divestiture And Share Price Weakness Have Created A Low-Risk/High Reward Opportunity

Note that there is better liquidity on the Toronto Stock Exchange (TSE: [[GGA]]).

An Overview of Goldgroup Mining

Goldgroup Mining (OTCPK:GGAZF) is a company that has come up in my research tangentially on a couple of occasions. Almaden Minerals (AAU)--which I recommended in June--owns a royalty on the Caballo Blanco Project, which Goldgroup used to own. They recently sold that project to Timmins Gold Corp (TGD), which I recommended shortly after the deal was announced. Given this deal's value at ~$25 million ($27 million at today's market price for Timmins' shares) and given the company's current market capitalization of just $15 million, I decided that this was an opportunity worth investigating.

It turns out that there are a few of prima facie reasons why the stock price is relatively low, and why it has performed worse than most junior gold miners in the recent downtrend.

First, the company's… Read More …