TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

Written by SmallCapPower.com

With the gold price nearing three-month highs we have identified five gold juniors that appear undervalued as each is generating more revenue than its market capitalization and has a industry-leading Price to Operating Cash Flow multiple of below 5.5x.

Since Price to Operating Cash Flow multiple adjusts for liabilities, receivables, and depreciation, operating cash flow is a more accurate measure of how much cash a company has generated than traditional measures of profitability such as net income or EBIT. 

The 5 gold mining companies we have identified that appear undervalued are as follows:

1. Galane Gold Ltd. (TSXV: GG)  (GGGOF) – $0.07 Canadian
Gold

Galane Gold Ltd. is a Canada-based gold producer and explorer with operations in Botswana and South Africa.

• Market Cap: $10 million CAD
• Total Revenue (LTM): $42 million CAD
• Price to Operating Cash Flow (LTM): 2.5x
• Debt to Equity (FY0): 64.8%

2. Primero Mining Corp. (TSX: P) (PPP) – $1.00 Canadian
Gold

Primero Mining Corp. is a precious metals producer with operations in both Mexico and Canada...

• Market Cap: $189 million CAD
• Total Revenue (LTM): $316 million CAD
• Price to Operating Cash Flow (LTM): 3.1x
• Debt to Equity (FY0): 17.7%

3. Metanor Resources Inc. (TSXV: MTO) (MEAOF) – $0.07 Canadian
Gold

Metanor Resources Inc. is engaged in the acquisition, exploration and development of mining properties, as well as the commercial production of the ore reserves of its Bachelor Lake and Hewfran properties in Quebec, Canada.

• Market Cap: $31 million CAD
• Total Revenue (LTM): $56 million CAD
• Price to Operating Cash Flow (LTM): 3.8x
• Debt to Equity (FY0): 15.5%

4. Aura Minerals Inc. (TSX: ORA) (ARMZD) – $1.83 Canadian
Gold

Aura Minerals Inc. is a Canada-based gold-copper production company focused on the operation and development of gold and copper projects in the Americas (Honduras, Brazil and Mexico).

• Market Cap: $67 million CAD
• Total Revenue (LTM)): $198 million CAD
• Price to Operating Cash Flow (LTM): 4.4x
• Debt to Equity (FY0): 23.7%

5. Timmins Gold Corp. (TSX: TMM) (TGD) – $0.52 Canadian
Gold

Timmins Gold Corp. is a Canada-based gold producer engaged in the operation, development, exploration and acquisition of resource properties in Mexico through its subsidiaries, Timmins Goldcorp Mexico, S.A. de C.V. and Molimentales del Noroeste, S.A. de C.V. (MdN).

• Market Cap: $185 million CAD
• Total Revenue (LTM): $196 million CAD
• Price to Operating Cash Flow (LTM): 5.4x
• Debt to Equity (FY0): 13.2%