Is pure gold mining a good stock to buy?

Pure Gold Mining is down 30% from its December highs after heading into Q4 as one of the top-performing gold stocks in 2020. This sharp correction has led many to assume that the stock is extremely undervalued, but it's important to note that the stock was severely overvalued into the correction.

What are gold stocks?

Gold stocks are public companies that extract, process, finance and trade gold. The best gold stocks on our list above are focussed on either gold mining or gold streaming. Gold mining is the practice of extracting gold ore from the earth and processing it into gold bullion.

Does pure gold have a reserve?

Given that Pure Gold has a total resource base of more than 2.0~ million ounces (excluding inferred ounces), pulling some resources into the reserve category is certainly possible. However, the key will be what price is used to calculate those reserves because Pure Gold is already using a gold price that is above most of its peers at $1,275/oz.

Will pure gold increase production?

The good news for Pure Gold is that while it's lumped in the junior producer column, there is the potential to increase mining rates and increase mill capacity, which could significantly affect production.