By Tayo Olayinka
When it comes to investing in gold penny stocks, the opportunity is exciting, especially if you prefer high-risk, high-reward investments. These stocks are typically from smaller, less-established mining companies that trade below $5 per share but have substantial growth potential.
Similarly, compared with traditional gold stocks, penny stocks allow you to invest early in small-cap companies. These companies might benefit from successful exploration projects, resource discoveries, or increasing commodity prices, which eventually means a high return on investment.
However, penny stocks are volatile, but they still attract investors because they allow exposure to the gold sector at a much lower entry cost. This makes it possible to accumulate significant shares for a small investment. So, if you are looking for exponential growth in gold penny stocks in Canada, we will share the latest data about potential gold stocks.
What are gold penny stocks?
Gold penny stocks are shares of gold mining companies trading at less than $5 per share. These stocks often belong to junior mining companies in early development stages or with high operational risk. As a Canadian investor, you can find their listings on exchanges such as the TSX Venture Exchange (TSXV) and the Canadian Securities Exchange (CSE), which are host to companies too small for the main Toronto Stock Exchange (TSX).
Top Canadian gold penny stocks to watch
Here are some of the penny gold stocks to buy now that show promise in 2024:
1. Belo Sun Mining Corp. (TSX:BSX)
Belo Sun is developing the Volta Grande Gold Project in Brazil, one of the largest undeveloped gold projects in the region. The project has faced legal and environmental hurdles but has significant upside potential if resolved. For speculative investors, this stock represents a high-risk, high-reward opportunity.
- Price: C$0.055
- Market cap: C$25.03 million
2. RTG Mining Inc. (TSX:RTG)
- RTG focuses on mining projects in the Philippines and has established partnerships with local communities. The company’s flagship Mabilo Project is a gold and copper project offering a diversified approach to mineral investments. With a low stock price and some attractive assets, RTG Mining could see growth if commodity prices remain strong.
- Price: C$0.04
- Market cap: C$45.15 million
3. Amex Exploration Inc. (TSXV:AMX)
Amex Exploration is a junior gold mining company focused on its flagship Perron Gold Project in Quebec, a region known for its rich gold deposits. The company has reported multiple high-grade gold intercepts at Perron, indicating strong resource potential. Amex is positioning itself as a significant player in the Canadian gold exploration space and continues to advance its drilling and exploration programs.
- Price: C$1.12
- Market cap: C$135.42 million
4. Troilus Gold Corp. (TSX:TLG)
Troilus Gold is advancing its Troilus Gold Project, which was a former gold and copper mine, in Quebec. The company has demonstrated strong resource expansion potential and, with a solid cash position, is well-funded for ongoing exploration and development. Troilus is one of the gold penny stocks with a strong upside based on recent drilling success.
- Price: C$0.305
- Market cap: C$110.69 million
5. Galleon Gold Corp. (TSXV:GGO)
Galleon Gold Corp. is focused on exploring and developing the high-grade West Cache Gold Project in Ontario’s prolific Timmins gold district. The company has made substantial progress towards advancing the project to production, backed by solid management and a history of successful regional exploration results.
- Price: C$0.25
- Market cap: C$16.58 million
Why invest in gold penny stocks?
The attractiveness of gold penny stocks lies in their growth potential. Companies in early-stage exploration or production phases can see exponential growth if they make significant discoveries or bring mines into production. As gold-mining penny stocks are typically priced low, even a modest increase in the company’s valuation can yield substantial returns.
Key drivers for gold penny stocks
- Rising gold prices: Economic uncertainty, inflation, and geopolitical tensions tend to push gold prices higher, benefiting mining companies.
- Exploration success: Companies making new high-grade discoveries can see rapid stock price appreciation.
- Mergers and acquisitions: Junior miners are often acquisition targets for larger mining companies, providing another avenue for gains.
How to buy gold penny stocks in Canada
To purchase penny gold stocks to buy now, Canadian investors should consider:
- Brokerage accounts: Most major Canadian brokerages, such as Qtrade or Questrade, allow penny stock trading. Ensure your broker supports trading on the TSXV and CSE, where many penny stocks are listed.
- Transaction fees: Penny stocks often incur higher fees because of their illiquid nature and over-the-counter trading. Ensure you are aware of these costs before investing.
- Portfolio allocation: Penny stocks should only constitute a small portion of a diversified portfolio because of their high risk.
Conclusion
If you plan to invest in gold mining penny stocks, you can give yourself exposure to the potential upside of the gold market while accepting higher risk. We have discussed stocks such as Belo Sun Mining and Troilus Gold, which have strong project pipelines.
However, you should do due diligence, as penny stocks are volatile and can cause losses if you don’t understand the risk-reward of a particular company. So, before investing in gold penny stocks, make sure you understand the risks and are ready for the wild price swings that often accompany them.
Alternatively, if you want more stable gold investments, you can also consider blue-chip miners such as Barrick Gold (TSX:ABX) or Franco-Nevada (TSX:FNV). These companies offer low risk while offering exposure to the precious metals market.
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The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.
(Top photo: Troilus Mine Corp.)
