Golds next bull run? What to buy?

By jbnaples, March 3, 2016

Gold looks to be headed higher even with a strong dollar so what are the best ways to play the next bull run in gold? I know Travis has (SAND) in his portfolio but I’d like to know his thoughts as well as yours. Do long term call options make sense for more leverage? I’d like to know what others who believe gold is going higher are buying and what worked best the last time gold reached new highs. Thank you in advance for your input. JB

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

niizajim
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PVG drilling update: http://finance.yahoo.com/news/pretium-resources-inc-valley-kings-090000424.html High Grade Gold Mineralization – Pretium Resources Inc. VANCOUVER, BRITISH COLUMBIA–(Marketwired – May 31, 2016) – Pretium Resources Inc. (PVG)(PVG) (“Pretivm” or the “Company”) is pleased to report the remaining results from the underground infill drill program at the Brucejack Project’s Valley of the Kings, including six intersections grading greater than 1,000 grams per tonne gold within long intervals of significant gold mineralization. (See Table 1 below for assays.) The 2015/2016 infill drill program was successful in confirming the style and grade distribution of the gold mineralization in the area that was tested. The results from… Read more »
hendrixnuzzles
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$PVG..long…thanks niz. I just recently started looking at drill core assays, so for those of you who have not let me offer my impressions. Caveat: I am not a geologist, not even an amateur one; just a regular guy trying to figure out which gold miners to buy. Here are my opinions on the drill results, which I previously predicted would be positive, and their implications for PVG as an investment. 1. GRADES: Ore grades are key, and the PVG grades are tremendous. I’m not talking good, not talking very good or outstanding even. I am talking tremendous. Many of… Read more »
investor101
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Thanks so much Niz & Hendrix. I read my emails on my phone but don’t always have time to respond. I am sure others have enjoyed all the hard work you do also. I wish the best for all of us as we try to survive these perilous times. I am also long several of these miners and I know they are looking forward to some better times too. They need it. Hendrix, I don’t know if you have any First Mining Finance and First Majestic, but I also own those and am thinking they may be major down the… Read more »
hendrixnuzzles
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Hi 101, I don’t know anything about First Mining Finance, will look at it but they must be better than FNV, SLW and SAND, which are core royalty/streamers for me and in which I am fiully invested. First Majestic I am familiar with and was recently long. I think it is a good miner and I will have no problem re-establishing a position in it. I sold my position to get stronger positions in PVG, SAND, and SA, which are core positions for me. I believe in silver but I think the short-term gold plays are more timely. The silver… Read more »
biotechlong (btl)
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$FFMGF (no current position)

Travis wrote a piece on FFMGF about 12 months ago. Here is the link:
http://www.stockgumshoe.com/2015/06/june-idea-of-the-month-silly-little-banks/

I was invested in FFMGF for several months, but sold my position (at a small profit) 6 months ago to free up capital to increase my ARTH stake. Since Travis’ write-up, FFMGF SP has more than doubled – now at .57, up from appx .23 a year ago.

Investor101
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Thanks so much. Don’t know where to go to find all this stuff. I appreciate it.
Also I saw where Porter Stansberry had another push for the Metro plan, his big dollar gold newsletter, and supposedly had Rick Rule on, and suggested 3 new gold stocks. Anyone know what they were? I miss your input frahman, and hope you will come back and share your expertise with us again.

hendrixnuzzles
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Yes I miss frahman also. Several of his links and contributions were very influential in my decision making.

dunnydame
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Hey 101, hn & btl – I bought some of those FFMGF shares for my Schwab account, but later at 35c in July. I’m quite happy with them & will sit on them for the time being. I think my spouse, the resident goldbug, has AG in his personal Schwab account, along with a lot of other commodities stocks. He’s in the mining industry and is also a big follower of Porter Stansberry and gets MANY of the newsletters. He’s into commodities, and I think in our joint account we can match each other, loss for loss, me with biotech… Read more »
investor101
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Penny, so glad to hear from you. Believe me as I told the others before, if they want to buy something at a lower price all they have to do is tell me and if I buy into it, I promise it will go lower! So I completely identify with you. 🙂 Well see if your husband will give us a hint about the 3 newest stocks recommended after the Rule interview. Even though I do have some Stansberry stuff, I did not buy the gold club deal. I can’t afford all these newsletters and really, really like our community… Read more »
dunnydame
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Oops, we do have AG in our joint account.
Out of interest, here’s our commodities holdings (joint acct):
$AG down 12%, $PXJ down 52%, $PVG up 22% (thanks HN),
$RBYCF up 159% (SP currently 5 cents) (lost money on $RBY, previous iteration of this company), and $SSRI up 59%
To keep this all in perspective, here are the top half-dozen holdings, by percentages, in our joint acct:
$NOBL 18%, $EFX 13%, $PACW 9%, $SUP 9%, $INTC 7%, $ROIC 6%
Note that none of them are biotech or commodities.
Cheers – Penny

hendrixnuzzles
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$MRLDF…Mariana Resources…long MRLDF While waiting patiently for the May announcement on the Chilean Dona Ines drilling program, which as not been released as of May 31, I came across an interesting article by a follower of MRLDF that explained something I did not understand. Mariana has a 100% interest in the Chilean Dona Ines project, which I believe will have reserves in the billions of dollars. Yet for a measly $1.65 million in drilling expenses, they are permitting a buy-in of up to 50% to the company doing the drilling, a local Chilean company. I wondered about the of such… Read more »
investor101
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Hendrix, had just bought 500 more shares of SAND, and of course it went down further. BUT I will hold until you tell me to run for the hills!

hendrixnuzzles
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Hi Penny and 101, please please I’m not an expert. I’m like you, just a regular person trying to protect myself. Retired guy who like to read and poke into things.

As far as advice about “running to the hills” on SAND, I’m like the traditional
guy who says about stocks: “Buy and hold.” Except the only stocks I feel this way about are the gold stocks, and a few biotechs endorsed by Doc !

jking1939
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FWIW – Seven+ Anatylsts Give $SAND A Buy Rating: http://www.lmkat.com/2016-05-31-analysts-give-average-rating-of-buy-to-sandstorm-gold-ltd-nysemktsand/
HN – Do you want this type of news?

jk

hendrixnuzzles
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Yes, It is good to know that sentiment is turning in favor of the sector. To the extent positive analyst recommendations change opinion, it is good to know. In the end what matters is the perception of gold as an alternative to the world of paper assets and fiat currencies, and the long-term price of gold. I don’t need an analyst to tell me about SAND, or tp agree with me. If there is a particular negative or positive about the company I am glad to know it, but honestly on my conviction picks I seem to have read a… Read more »
hendrixnuzzles
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$SAND and $MRLDF…clarification of Sandstorm royalties on Hot Maden… in prior posts, I may have created the erroneous impression that $SAND’s 2.0 net smelter royalty pertained only to the 30% interest of Mariana Resources in the Hot Maden property; and also, that a certain percentage of the non-gold reserves at Hot Maden would accrue 100% to Mariana. I emailed the director of Investor relations at Sandstorm for clarification of these points. He informed that Sandstorm Gold’s 2.0% net smelter royalty applies to the entire project including the interest of JV partners. He also informed that all mineral production from thr… Read more »
arch1
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For those whose mining stocks include Uranium, you may find interesting this late development Susan Bauer, PNNL, (509) 372-6083 Dawn Levy, Oak Ridge National Laboratory, (865) 576-6448 Materials TestingDownload Original Image Oak Ridge National Laboratory researchers developed a fiber to adsorb uranium from seawater. Researchers at the Pacific Northwest National Laboratory exposed the fibers to Pseudomonas fluorescens and used the Advanced Photon Source at Argonne National Laboratory to create a 3-D X-ray microtomograph to determine that the fiber structure was not damaged by the organism. previous 1 of 2 next OAK RIDGE, Tenn – The oceans hold more than four… Read more »
hendrixnuzzles
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The problem with alternate technologies for uranium is that the U308 prices are very low and there is no problem with existing supplies. So it is hard to envision a lot of capital being deployed to develop new production methods. The stuff is too cheap and plentiful as it is.

arch1
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I agree and that was my point in posting,,, another reason to not expect a steep price increase in future.

investor101
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Thanks arch for that great article! I find that I am learning all the time from you smart guys and gals.

hendrixnuzzles
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$MRLDF…instead of news releases on the Chilean Dona Ines project, Mariana Resources has given a press release stating that they are making the Turkish Hot Maden project a priority development, and that is “has set the bar quite high” for their other exploration projects. In infer from this that they do not care so urgently to release drilling results on Dona Ines. Obviously the Hot Maden project is much further advanced, so this is understandable; except for the fact that they went on record as saying the results would be released in May. No change for me in outlook, I… Read more »
hendrixnuzzles
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GOLD BULL TECHNICIAN WARNS OF TEST
http://www.marketoracle.co.uk/Article55399.html?

The technical analyst in the link above is a gold bull but warns that a sharp test may be just ahead. He names the possible low prices that might be expected, using Fibonacci retracement percentages. With the uptrend since January in a stall, he calls out lower levels that may be touched upon before a resumption upwards of gold prices.

I think it is important to prepare for this possibility, at the very least emotionally. Whether one wants to take concrete action or not by reducing or hedging positions is another question, best decided on beforehand.

jking1939
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HN – A very sincere thanks for all you have done for me personally, and the rest of the Gummune. I am especially thankful for finding a trustworthy source for my, and my kids, portfolios in precious metals. Personally I am long in $PVG, IVPAF, BRIZF, and have added to $SAND. And, I am especially thankful for $MRLDF, of which I am deeply long. I stumbled around in this arena for a couple years and ended up selling all precious metal stocks simply because I couldn’t find a trustworthy source for information. And, of course, there is the Velikovsky connection,… Read more »
hendrixnuzzles
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jking…thank you very much for the kind words. I really don’t see how we can be badly hurt on PVG, IVPAF, BRIZF, and especially SAND.

Best wishes

Travis Johnson, Stock Gumshoe
Admin
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FYI, you’ve probably already seen this but the Angry Geologist (a blogger) posted a critique of the latest Pretium drilling data here: http://angrygeologist.blogspot.pe/2016/06/pretivm-bulla-crustulum-or-raptus.html Part of one of his comments: “I get this nagging doubt when I look at the various maps that the high grade zones don’t link up between drill-holes (this could be due to the extreme nugget effect), the gold appears to be found predominantly in very narrow bonanza zones, and the well publicized issue back in Oct 2013 when Graham Farquharson of Strathcona Mineral Services said ‘there’s an excellent chance that they could have a small tonnage,… Read more »
arch1
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Travis thank you. That is a very good post, in that the nature of a vein of gold in hard rock tends to maintain uniformity whereas a rubble or gravel deposit is made up of nuggets down to dust, of metal that has been ground out of exposed veins by glaciation or streams and left in the bottom of cracks and hollows in the valley bottom, sometimes to be covered by further soil and rock deposition through floods of lava or streams of water. There may be extremely rich pockets in a mostly barren rubble deposit. The question is that… Read more »
hendrixnuzzles
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PVG…The contrarian point of view expressed by Strathcona is what has created the price and profit opportunity in Pretium. Strathcona declared there were no viable economic reserves there, on account of the unpredictability of the veins. Thus there was controversy and doubt on how much gold could be counted upon, based on the nature of the deposits; and the price of PVG went down the tubes. I have read everything I can get my hands on about the drill results since then, and the concrete actions taken by the participants and backers. I became convinced a little earlier than most… Read more »
arch1
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In case my prior post is taken amiss $PVG is my second largest metal holding, $SAND is third. In my view any extra expense $PVG has in production should be easily offset by the extremely rich quantity/quality of many of the test drills. I am presently showing a small loss and buying on dips. I think the more info the better, even if some raises doubts to be investigated.

hendrixnuzzles
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The mine is difficult in that it is underground. But they have decided from the beginning to bulk process the ore, and lo and behold, their forecasted costs per ounce is pretty low.

Full speed ahead. The Strathcona fiasco was three years ago and the mine is going into production in 2017. The new pictures on the website show that the worker dormitories are built. This thing is happening.

Travis Johnson, Stock Gumshoe
Admin
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I don’t doubt it, and they sure have the facilities and financing — just like to try to pop my head in from time to
time with my perhaps overly cynical reminders that nothing is 100% certain. I wouldn’t fear that the mine won’t produce, but would leave open the possibility that it will produce less than expected sometimes, or at higher cost.

fsgdu77077
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Remember Bre-X, another Canadian miner? I was once bitten, now twice shy. Not saying PVG would go to that extreme, but there is never such thing as too much caution when investing in junior miner.

hendrixnuzzles
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FED WATCHING…it is interesting, a bad jobs report that investors interpret to mean that the Fed will not tighten by .25 percent in June, sends the price of gold into a spike, and also the stock market sells off.

What people need to realize is that it is the value of the US dollar which is being jerked about. Gold is gold, and it’s value doesn’t really fluctuate that much on such news. It is the dollar going down, not gold going up.

arch1
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HN You have it exactly right. You should see the waves in foreign exchange this am. All the World monetary blocs are being manipulated and no one knows what to expect next. When you push in here, it pops out there, or there or somewhere else. IMHO

Sharon Schreiner
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Heh heh..that is right, and since my mortgage is in dollars, my gold may one day enable me to pay it off. No cloud without a silver lining.

hendrixnuzzles
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Jking…if you haven’t noticed, $SA Seabridge Gold has joined my conviction picks PVG and SAND. These are a good triad, since PVG is a producer, SAND a royalty/streaming company, and SA is a pure gold-in-the-ground optionality play. Seabridge has been highly recommended by some big-time analysts and newsletter types. My own due diligence has persuaded me that this is indeed a top-tier gold explorer and developer to own. It is strictly futures, no imminent production; but their property has tremendous reserves and the value is really there. I am overweight in MRLDF, I loaded up on speculation about the Chilean… Read more »
jking1939
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Many thank! I will see about picking up some $SA Monday morning.

jk

hendrixnuzzles
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Yellen’s Golden Jawbone Shatters So much for saber-rattling about a June rate hike. I don’t get it, we all knew the economy sucked before the jobs report came out anyway. Lots of black ink when the average one day increase in the gold patch was 10%. My largest positions SAND and PVG were up 11.83% and 12.84%. There is still something deeply unsettling about the situation. Finger-wagging by Yellen about a .25% rate hike in May sends gold to the gutter. Then a bad jobs report boxes in the Fed for another 60 or 90 days…gold goes up 2.8%…and gold… Read more »
arch1
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World financial conditions are extremely jittery. My opinion only is that a major break is coming. My problem is I have no idea whether up or down at this time. I intend to hold my metals stocks in case the dollar snaps and drops.

hendrixnuzzles
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That’s what happened today, in the end the dollar devalued a few percent against gold and the others.

hendrixnuzzles
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Strathcona…Farquharson…PVG…FNV
An interesting connection noted some time ago is that the chief of Strathcona, Graham Farquharson, also sits as a director of Franco Nevada, and that Franco Nevada has a royalty due them on Brucejack. So at some point a few years ago it looks like PVG threw a bone to Strathcona, with a nod to FNV, giving Farquharson/Strathcona the survey job; and they were badly disappointed by Strathcona’s report, which shocked and sent the stock into a nosedive.

But three years FNV still has an interest. If they were still persuaded it is so risky they could sell it.

hendrixnuzzles
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BIG CAP GOLD MINERS…there was tremendous responsiveness today in the big cap miners on a $30, 2.5% move in the gold spot price. The move in the big caps was over 10%, markedly more extreme than the explorers and speculative optionality plays. As noted previously, I am a little overweight in the small cap optionality plays and underweight in the big caps. This was a short-term decision based on my assessment of coming news. Will look to make some adjustments in the coming days, my targets being AEM, NEM, and ABX. Naturally I do not plan to reduce holdings in… Read more »
hendrixnuzzles
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$MUX McEwen…no position…link to news

http://www.kitco.com/news/2016-06-03/McEwen-Mining-Sees-Cash-Holdings-Increase-169-From-Dec-2014.html

Do not follow $MUX closely but a few readers have expressed enthusiasm about it.
The personality of Mr. McEwen comes through even in a dry press release. Liking it.

hendrixnuzzles
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$PVG long $SA long…I was going through the PVG website looking at the new pictures of the ongoing construction and I noticed a header that was about Snowfield, a secondary target near the Brucejack project. I wandered into it and found the following information. You will recall that I have called out the proximity of other explorers having claims that abut or are nearby the Pretium claim boundaries….and guess what, Seabridge has a big one: “We have entered into a confidentiality and cooperation agreement with Seabridge Gold, whose KSM project shares a common boundary with Snowfield. The Mutual Confidentiality and… Read more »
investor101
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Good morning, Hendrix, thanks for the update. It just gets more interesting and involved. I think we are positioned well to cover the bases, I just don’t know if I have enough to make a difference in my portfolio. Wanted to ask you and Travis if you know what Jim Rickards is speaking of with his Midas system, 15 stocks “The Penny Gold” Allocated Portfolio? Gosh it seems that every newsletter publisher is jumping on this bandwagon and charging exhorbitant amounts for their opinions!! I really don’t know if the little person stands a chance in this environment. Look at… Read more »
hendrixnuzzles
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In the gold sector I do not believe one needs to spend money to find good picks. The universe is pretty limited on the big players and the royalty companies, and the ETFS and indexes are well known. There are a lot of micro caps and explorers, but how many does one need ? Myron Martin has given us a whole bunch and we have found enough others on our own to populate a robust speculative portfolio. In the end, the gold plays will succeed if gold prices go up. Some will succeed more than others. But I see no… Read more »
Travis Johnson, Stock Gumshoe
Admin
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Haven’t looked at it yet, but I’d be pretty surprised if many of the ideas were outside the universe of gold stocks that are talked up over and over by the Stansberry/Casey folks and others. I think I skimmed it a while ago and there were only a few that could be clearly matched (other clues not specific enough), but I’ll look again.

investor101
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Thanks so much, Travis!

hendrixnuzzles
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Thanks for the call-out, Travis ! Travis in his Friday column made some flattering references to this thread. It is especially gratifying that we have more posts than the powerhouse Stansberry thread, even discounting the fact that I am probably responsible for a majority of the postings. There have been a lot of exciting things that have happened in gold since JB started the thread back in March. I’m looking for a good hiatus to close this edition and start a new one. Honestly I thought there would be an announcement on MRLDF concerning their Chilean project, but this has… Read more »
ksand52
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Hendrix let me apologize up front if I am out of line (but bear with me just a bit and let me explain). I believe I remember early on in this thread that You made a comment about not being interested in Lithium as a mining play, but based on my own research I felt compelled to bring this before the group for those that might be interested. This is not a recommendation to buy but merely a heads up to put it on your radar if you are interested. (DO YOUR OWN HOMEWORK) This company is ticking all the… Read more »
hendrixnuzzles
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Thanks, nothing to apologize for. This is the kind of help we are all looking for.
As you said, everyone should do their own due diligence. Thanks for the ticker, I know nothing about lithium.

One thing… lithium is an industrial material so we shouldn’t expect lockstep correlation to gold and silver, unless there is strong commodity price inflation.

niizajim
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$PVG – currently no position

Hendrix, you said:
“The new report is due in June. What will happen is that the assets of gold in the ground controlled by Pretium will go UP. By a lot.”

I thought their feasibility study was due in Q3. I guess you are not referring to the feasibility study, but an updated resource estimate?

hendrixnuzzles
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Yes, they said the latest drill results would be incorporated into a revised resource estimate in June. My understanding is that more detailed revisions to mine life and economic forecasts are done after the resource estimates are digested. A feasibility study is moot…. the mill is under construction and is going to pour gold for sure in 2017. So the main issue is the size and scope of the gold in the ground that they will be able to process through the mill. Expansion of the gold-in-the-ground reserves obviously enhances the return on the money spent for the mill and… Read more »
hendrixnuzzles
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Hi Niiz, may I ask what gold positions you do have ?

niizajim
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I had a little $PVG, but when it started going down, I got out. I was proud of myself for that move, but then of course, I didn’t get back in in time to catch the big upward move the other day. So right now I have no gold positions. I want to, but I am a VERY small investor. Am heavily involved in $ARTH. I have a little CDNL, FLKS, REPH, and have been in and out of CCXI, PVG, True Gold Mining – now a part of Endeavor, and CYDY. I might be missing one somewhere. I did… Read more »
hendrixnuzzles
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Thanks, Niiz. Was just curious if there were some AU stocks you liked more than PVG. Best wishes. Buy some SAND !

niizajim
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I’ve been following your posts on SAND and it looks like a good long term stock to me, but correct me if I’m wrong, I don’t see the potential there for large gains in the near term. I guess if the price of gold goes up, it will perform along with other gold stocks, but for some of the appreciation to happen that they have in the works, it seems like it is a long ways off. Am I wrong? So with PVG going to begin pouring gold at the end of next year and with a fully permitted and… Read more »
hendrixnuzzles
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$SAND…potential price appreciation…Hi Niiz, in my opinion there are a number of events which could trigger a substantial appreciation in SAND share prices. When I say substantial, I mean a doubling or tripling of the stock price within a matter of months. This is not a prediction, it is only a response to your question about potential price catalysts. –any major price increases in metals –continued change in investment attitudes towards metals –announcement of a dividend –major announcement about Hot Maden development in through Mariana Resources –Positive developments with a major royalty asset not included in current cash flow –New… Read more »
Sharon Schreiner
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HN, I have done some comparing of charts in the past of different gold stocks, etc, to see if the past gold bull market would give an indication of which companies saw their stock prices increase the most…and SAND was impressive.

hendrixnuzzles
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Hi Niiz, this is from your posting May 31 of the PVG press release:

“The 2015/2016 infill drill program was successful in confirming the style and grade distribution of the gold mineralization in the area that was tested. The results from the 2015/2016 infill drill program and a revised geological interpretation are being compiled and will be incorporated into an updated resource estimate for the Valley of the Kings.”