As you know, the gold sector is going through one of its toughest times in decades. Most gold producers have watched their stock price push lower for four straight years.

Yet, one company in particular — one of the lowest-cost producers in the industry with a strong asset base — saw its stock fall much more than its peers’ over the past 12 months.

That’s why last month, I told my subscribers to buy it.

And since my call, shares of Yamana Gold (AUY) are up nearly 40%.

Yamana is a Canadian-based gold producer with projects located in Brazil, Argentina, Chile, Mexico and Colombia. Its seven producing mines have been generating over one million gold equivalent ounces (GEO) for years.

To be fair, most gold stocks moved higher over the past two months. However, Yamana easily outperformed its peers.

Despite the recent gains in the stock, Yamana still has huge upside potential. Based on my research, shares could pop more than 50% from these levels over the next six months.

Yamana Gold has had its share of ups and downs over the past few years. However, the downturn in the stock since 2014 has been brutal.

In fact, the stock is trading near its IPO price from more than 10 years ago.  To put this in perspective, Yamana was producing roughly 100,000 of gold equivalent ounces (GEO) back then. Today, the company produces 1.2 million GEO annually.

The underperformance can be attributed to Yamana’s large debt position. For example, Yamana is sitting on $1.8 billion in debt. That’s a huge number considering Yamana’s entire market cap is just $2.3 billion.

With the stock trading right around $2.50, the market clearly believes Yamana could file for bankruptcy in the near future.

These debt fears are overblown.

Yamana will not file for bankruptcy anytime soon. And if gold moves just slightly higher from current levels, Yamana could offer investors massive returns.

The company’s $1.8 billion in debt is a large number. However, most of this debt won’t come due until after five years. And roughly 35% of this debt won’t come due until 2024.

In the shorter term, Yamana only has to pay $118 million in principal repayments over the next two years and a total of $230 million in principal repayments through 2018.

Yamana has $120 million in cash on its balance sheet. The company also has $260 million left on its revolving credit facility. This amounts to a total of $380 million, or enough cash to pay its $230 million in debt obligations through 2018.

The company expects to produce over 1.5 million ounces of gold and 15 million ounces of silver annually for the foreseeable future (most of Yamana’s assets have more than a 15-year mine life). If gold stays at current levels over this time, Yamana should generate at least $500 million in cash flow annually.

In short, Yamana Gold has plenty of cash to service its debt through 2018. The company also has plenty of cash left over to buy more projects and build up existing mines.

And my estimates do not include any restructuring. Management recently stated that it’s aggressively looking for ways to further pay down debt through refinancing and by using cost-cutting initiatives.

Plus, Yamana could generate an extra $150 million in the next few months through its Brazilian assets. This is a huge amount of cash that’s not factored into the stock price.

For example, Yamana has 50% of its costs hedged on their Brazil portfolio (accounts for 40% of total production). This has been a negative for the company since Brazil’s currency is down 60% over the past 12 months.

Remember, gold is priced in dollars. And Yamana should be seeing much lower costs to produce gold in Brazil with its currency down so much.

These hedges will roll off in 2016. Yamana predicts it could see a net benefit of up to $150 million in cost savings once these hedges expire.

This cash could be used to further pay down debt. More important, this will ease the solvency fears — which is the major risk that pushed shares down to these super-depressed levels.

Yamana Gold’s tangible book value is $6.80. This amounts to a 65% discount to where Yamana Gold is trading today. The company also expects to produce over 1.5 million ounces of gold annually at least over the next few years.

Based on valuation alone, Yamana should be trading north of $4.50 a share. That’s nearly twice the current price. However, if gold finally comes out of a bear market… or begins pushing higher over the next few years — Yamana could easily return three times or more on your investment.

To put this gain in perspective, Yamana just needs to push back up to its 52-week high to generate over 300% returns for investors.