We’ve been looking at Rye Patch Gold for nearly two years now. As an exploration company with limited quantifiable value investors have remained largely uninterested: shares have lost nearly 40% of their value in USD terms. This is actually better than both the GDX and the GDXJ, however we are still frustrated. Rye Patch Gold has a strong cash position (C$4 million as of the end of September) that is regularly replenished thanks to a royalty on Coeur Mining’s Rochester Mine. This has generated ~C$6 million the trailing 12 months ended September 30th vs. the company’s current market capitalization of C$21 million. It should continue to generate gold and silver leveraged cash-flow for the next three years or so. Unless gold and silver prices crash it follows that Rye Patch trades at the level of cash on its balance sheet. The company has released a PEA on its Lincoln Hill Project.
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