AltynGold PLC: A Severely Underpriced Gold Miner

AltynGold represents the ethos and mission of Gold Standard Finance. In that it is an asset that is undervalued, overlooked, real and underappreciated.

The company is a London-listed miner with deep family ownership, operating in Kazakhstan — a region whose central bank, along with those of Russia and China, has been steadily increasing its gold reserves. The company is majority owned by the Assaubayev family, with a 65.6% controlling stake.

AltynGold’s core asset is its 100% interest in the Sekisovskoye gold mine. The company also has an exploration site at Teren-Sai. Both mine sites are located in north east Kazakhstan.

As fiat currencies such as the US dollar, sterling, and euro continue to erode in real terms, gold remains one of the few true stores of value. Even if the gold price were to flatline, AltynGold remains productive and profitable — and on current numbers, dramatically underpriced.

Performance and Select KPI’s

Despite negative free cash flow in 2023 due to expansionary capex, AltynGold rebounded strongly in 2024. Margins now exceed 40%, and earnings have more than doubled.

The average realised gold price in 2024 was $2,441 — a marked increase year-on-year. FY25 is likely to be even stronger, with spot gold having briefly reached $3,500, before consolidating above $3,300 in Q2.

The 2023 cash outflow was driven by capex to expand processing capacity at Sekisovskoye. This investment is already bearing fruit and will allow materially higher production going forward. We can already see the early fruits of this labour as H125 interims shows robust growth of $32.0m / 84% to $70m. All other things being equal this would equate to total revenue of $140.0m for FY25.

Valuation

Why Is It So Mispriced?

• Geopolitical Discount: Kazakhstan and the broader Eastern Europe region are out of favour — but that risk is already priced in.
• Sector Disdain: Gold remains unloved. How many people own gold compared to a Magnificent 7 tracker?
• Debt Narrative: Debt concerns are overstated and likely to be quickly alleviated through rising equity value and cash flows.

Control & Minority Ownership Dynamics

That the company has a controlling shareholder would likely put off certain investors, particularly institutions and hedge funds of a certain stripe. Having a single party in control means that other investors on the register are unlikely to have any material influence. Even large institutions with deep pockets who could cooperate with one another would have limited influence – ultimately the Assaubayev can run things as they see fit.

For retail investors this would always raise some concern when one shareholder has no real economic checks and balances, however in this case there is a benefit to this structure. The investor gets to participate in the upside of an undervalued operating asset with little need to be involved. The Assaubayev family have the motivation and skin in the game to drive performance and by extension future value. The fact that an investment in AltynGold would effectively mean being a true minority investor, which is what makes the opportunity even more appealing than what the numbers and progress already show.

It is also worth mentioning for balance that there is strong oversight with four independent directors from a variety of professional backgrounds, which make up 57% of the board.   

Conclusion

An investment in AltynGold serves as a leveraged bet on the price of gold – due to how operationally leveraged miners are, even modest increases in the gold price often translate into disproportionately higher profits. A 5% increase in the price of gold could increase profits by say 10% to 15%.

The macro environment also continues to be supportive of increasing gold prices. The fiscal picture continues to worsen with ever expanding deficit spending (US passing the Big Beautiful Bill) and Government’s inability to rein in spending (UK Labour party watering down its bill to cut its ever burgeoning welfare spending).

Add to this the clear signs that we are already in the midst of economic stagnation –  there is no meaningful economic growth across the Western world, certainly not in the productive sense. Whatever GDP growth is reported is usually anemic, and often only a result of increased (and unproductive) government spending.

Central bank demand and purchases of gold are at multi decade highs, but central bank gold ownership is at all-time lows i.e. it remains an under owned asset.   

AltynGold’s ownership is also eager to assess regional and domestic growth opportunities, including “advanced-stage assets aligned with its strategy to become a multi-asset, multi-jurisdiction gold producer.” The Assaubayev family have been good stewards of the business over a difficult decade for gold producers and have prudently kept their powder dry. However with the buoyant gold price environment it is good to see their ambition to really capitalise on this opportunity.

We are even starting to see production ramp up rapidly. All in all, we are in a world where cash yields 3/4% at best, which result in negative real interest rates (after taking account of price inflation). The price of gold is only likely to kick on from here.

Altyn represents an asymmetric upside play with forecast free cashflow yields well in excess of 15/20%. The share price is currently hovering around £5 per share and we have been steadily accumulating. Even if the price was £12 per share it would still arguably be undervalued, still offering a forecasted free cash flow yield of 40% — a strong yield for any business.

The author holds shares in the equity.