This one comes in to us from Louis James at Casey International Speculator, and it’s all about gold exploration and mining stocks — mostly small ones, it appears (it is called Speculator, after all), so perhaps we can consider this as a potential shopping list for contrarian and mostly hated small gold stocks.
Which is about as contrarian as you get these days — there are commodities that have done much worse than gold, including both oil and iron ore, but junior gold stocks are where most of the “animal spirits” of speculative natural resources investors are born… and there aren’t many of those folks around right now. They’re either licking their wounds after the last six months of “buying opportunities” blew up in their faces, at least for now, or they’ve moved on to other areas of exciting speculation like the small early-stage tech and biotech stocks.
So perhaps it’s now time to look at these little guys? I left my crystal ball in my other trousers, but I can at least dig through the tease from Mr. James and tell you what stocks he likes…
This sums up the gist of his big picture argument about the bear market in gold stocks pretty well:
“Here’s one thing I learned about bear markets.
“Mainstream investors generally view them as bad, but what they really are is gigantic filters: they separate the good from the bad, the jewels from the junk.
“The current bear market in gold stocks has been very effective in doing that—which means right now we’re looking at a gourmet selection of well-run companies with proven, high-grade assets to pick from.”
Of course, that won’t mean anything if gold spends the next five years going down to $500 an ounce — but if you have any certainty about where gold will be in five years you’re a wiser soothsayer than I am, I just allocate a bit to gold and to other commodity-type stocks and make sure not to let big “bets” about commodity price moves take over a large portion of my portfolio.
He starts off, as so many of these teaser pitches do, with a “freebie” … he says that his “Vertical Candidate #1” is Pretium Resources (PVG in both Canada and the US), which has the rich Brucejack project in Canada. That’s not terribly small — it’s got a market cap of about $600 million and it’s trading at about book value. He says he still thinks it’s undervalued because it’s such a “monster-sized, super-high-grade gold deposit.” Future valuation obviously depends on gold prices, as with any gold miner, but they have a lot of fans — including a large Chinese gold miner, which bought in to own about 10% of the company back in January at prices pretty close to where the shares now trade (they paid C$6.30, it’s C$6.75 now).
Pretium is up pretty nicely today so far and is doing much better than the average miner, but over the last six months or so it has been trading roughly in line with the group — so perhaps if it’s markedly better than the average gold stock, and all gold stocks are being sold off, that’s your “relative value” opportunity. The latest quarterly report came out a couple weeks ago, you can see the press release here.
I can’t say I’m an expert on this or any other stocks where interpreting assay results is a key part of determining value, but Pretium does have strong management in Robert Quartermain, who has built strong mining companies before (the Casey folks and other investing pundits in the space talk a lot about the importance of “buying management” in natural resources stocks — perhaps because the industry is so full of charlatans).
So that’s one… how about the “secret” stocks that they don’t want to name for us?
“Vertical Candidate #2: Still Good Under $1,000 Gold
“This company is the only gold producer in my Vertical Portfolio….
it recently acquired a mine and mill that has saved shareholders a lot of time and money.
“The company is still ramping up production at its high-grade Nevada deposit but already exceeded its 2014 production guidance by 25%, pouring more than 107,000 ounces of gold-equivalent (with the “equivalent” being silver)….
“Pretium-style numbers from the latest (October 2014) drill holes—one hole generated 1,474.6 grams of gold per tonne (g/t) over 0.62 meters; another produced 1,404,6 g/t over 0.53 meters….
“The company expects to produce more than 100,000 ounces this year. While that’s not a huge amount, it’s plenty enough to keep this producer above water—even if gold goes nowhere for years or even drops below $1,000 for a time.”
This one, sez the Thinkolator, is Klondex Mines (KDX in Toronto, KLNDF OTC in the US) — you can see the press release where they announced those impressive drill results back in October here. The market liked those drilling results, the stock is up about 15% since then (or 25% if you’re thinking in Canadian dollars). They report in a week, and analyst are expecting 2014 to be finalized at a profit of 12 cents a share — and for that profit to double in 2015 to 24 cents (all Canadian numbers). I don’t know what gold prices they’re using for those estimates (there’s a wide range of estimates, no surprise), but that would mean a forward PE of about 10 — not bad. You can see their latest investor presentation here from a February conference, but the stock could easily react when they update their 2015 forecast next week on their earnings call.
Next?
“Vertical Candidate #3…
“Until recently, this company was a small, under-the-radar explorer advancing a significant, high-grade, but not huge gold project in Canada.
Are you getting our free Daily Update
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just click here...“Then, last October, the company surprised everyone by buying a fully permitted and operational 2.4-million-ounce mine ‘next door’ for pennies on the dollar….
“The new mine comes with underground infrastructure that can be used to access the company’s existing property without building a new portal or having to use new civil engineering on surface.
“And on top of all that, the company recently delivered a new discovery of high-grade gold, including 1.6 meters grading 101.8 grams of gold per tonne….
“An updated preliminary economic estimate—which doesn’t even account for the drill results I just mentioned—shows an after-tax internal rate of return (IRR) of 59%.”
This one, sez the Thinkolator, is tiny little Integra Gold (ICG in Canada, ICGQF OTC in the US), which has a market cap of about $55 million. They did make an acquisition of more mining land and a mill adjacent to their Lamacque project in the Abitibi Greenstone Belt in Quebec that have improved their economic assessments, they now say that their internal rate of return for the project is 77%, which sounds pretty good, and they give a “net present value” of C$185 million on the project as of January (with gold at $1,175).
As usual, I don’t know much about this one — their stock has done better than the average miner over the last six months or so, but are also down sharply over the last couple weeks and it’s very small and volatile. They won’t be profitable this year, but they do have about $10 million in cash for their drilling and exploration costs and their property is in an established mining area and should be low-cost — they think they will have a sustaining cash cost per ounce of only about $650, so if that’s true the mine could pay for itself in just a year or two if gold stays at these levels and they can get decent mine financing. There’s a little summary of some pundit/analyst opinions on this one over at the Gold Report if you’d like to do some browsing, and you can also see the company’s presentation here.
More? You got it!
“Vertical Candidate #4: This one’s a straightforward value proposition. The company discovered a large, high-grade gold-silver deposit in Colombia and has plenty of cash to advance it through feasibility work to a production decision. Despite this, the company’s enterprise value is less than book, let alone the billion-dollar net present value of the project.”
That’s not a lot of detail for the Thinkolator to work with, and there have been several very large deposits discovered in Colombia in the last decade or so and that haven’t yet been mined — but the best guess is that this is Continental Gold (CNL in Toronto, CGOOF OTC in the US) and its Buritica multi-million-ounce property in Colombia that they hope to put into production by 2018 (and yes, if you had asked a couple years ago, that goal would have been 2016). The resource value looks huge, it has been given a net present value of $1+ billion, and they do have C$60 million or so in cash to keep working even with gold prices weak. The stock has recently done far worse than most of the miners noted here, down about 60% in the last six months — I haven’t looked into the details to see if there’s a good reason for that or not.
And still more:
“Vertical Candidate #5: This company makes our list via another of those rare beasts in the mining world: its gold deposit in Europe is both large and high grade. This combination makes it likely that barring any yet undiscovered fatal flaws, the project will become a highly profitable gold mine at any likely gold price (including significantly lower than today’s).”
So… another one that’s fairly light on the clues, and I can’t be certain, but the Thinkolator’s best candidate here is Gabriel Resources (GBU in Canada, GBRRF OTC in the US) and their Rosia Montana mine in Romania. This is a huge potential mine that they think can produce half a million ounces of gold per year for a decade or longer, but the permitting process has been up in the air for several years, with waxing and waning fights with environmental and local groups, and they’re currently trying to get moving with a “dispute resolution” process with the government.
This is one where it’s pretty clearly cheap if they can go forward as they have planned and gold doesn’t collapse, even though they have to raise probably $1.5 billion or so for construction once they have permitting and a “go ahead” — but I have no idea how to handicap the regulatory and political situation. They still have more than 100 families living in areas where they need to buy the land to do surface work for the mine, even after relocating about that many starting something like TEN YEARS ago… this has been a “story stock” based on the potential of Rosia Montana for a looooong time, close to 20 years, and it’s now very close to all-time lows.
Have a better guess for a big European gold mine? There are some large potential mines in Turkey and Serbia, too, and some that look like they have much less political risk like Dalradian’s (DNA in Toronto, DRLDF OTC) mine in Northern Ireland (much smaller than Rosia Montana, but still pretty large and high-grade) … but, flipping a coin, I’ll stick with Romania and Gabriel Resources for my guess about Louis James’ “vertical candidate.”
And yes, there’s more:
“Vertical Candidate #6: This junior miner’s Canadian gold project has all the signs of a large, low-cost mine in the making. The current preliminary economic assessment shows after-tax 5% discounted net present value of $285 million, yielding a 24% internal rate of return at $1,200 gold. That’s not the highest margin in our portfolio, but the project still works at $1,000 gold and has terrific leverage to the upside.”
This one, sez the Thinkolator, is most likely Kaminak Gold (KAM in Toronto, KMKGF OTC in the US). Those numbers mesh with their press release about their Coffee Project in the Yukon from last June. Interestingly, they also include a “sensitivities” table in that press release that illustrates the leverage the project has to gold prices — so yes, at US$1,200 gold they give themselves a NPV (discounted at 5%) of C$285 million… at $1,000 gold that number drops by about 60% to just C$99 million. They don’t really own any other projects, though they do have a bunch of “prospects” that they’d like to sell or partner — I don’t know anything about those, but I assume the market considers them largely worthless right now. Kaminak we’ve written about before, but it’s been quite a while — they were one of the “hot” names during the renewed Yukon gold rush that probably peaked in 2011 or so.
The market cap is right around $80 million right now, and they have about $20 million in cash — so they’re not in danger of disappearing, and they also have some big names invested in the company — Ross Beaty and Lukas Lundin, who are mining investment legends, invested after that new preliminary economic assessment came out last June (which accounts for a lot of that cash balance). If you feel like buying, I guess the good news is that today’s price is about the same price those two legends plunked down to buy their stakes (you won’t get warrants like they did — though those warrants should be worthless unless the stock climbs 50% by June).
And one more…
“The least undervalued miner in our Vertical Portfolio. That’s because its high-grade gold project in Ontario is the closest to production. Mining has already started underground, ore is being stockpiled, and construction of the mill is nearing completion. It’s still a good buy, though, and like all our other ‘vertical’ picks, it’s expected to deliver high margins.”
This is, very likely, Rubicon Minerals (RBY). They’re mining at their Phoenix project in Red Lake, Ontario, and the mill should be completed by this Summer — leading analysts to think they’ll pretty much break even this year. It trades at a sharp discount to book value, and they have plenty of cash, but it isn’t the same kind of crazy levered play as a $100 million stock with a billion dollar deposit. Whether it’s more or less undervalued, I’ll leave it for you to decide.
So there you have it — seven stocks, all gold miners or hope-to-soon-be gold miners, and I’m quite certain that most of these (a couple are educated guesses) are being teased by Louis James as his “vertical” picks in the beaten-down gold sector. Will many of them go shooting up in the years to come? Well, that I can’t tell you. I’m no mining expert, and certainly couldn’t tell anyone my forecast for next year’s gold price with any degree of confidence (if you’re wondering, yes, I do own some gold and have some gold equity exposure — but that’s kind of a currency insurance, my portfolio will probably do better, on balance, if gold collapses).
Have any opinion on Louis James, the Casey International Speculator, or any of these gold miners and explorers? Let us know with a comment below. Thanks!
over a year and a half ago, I was convinced that the dollar was being devalued (printing money, the national debt up so much, the fed balance sheet ballooning) but thought that the Euro would go down even more (similar reasons plus additional problems) and Japan was trying to weaken the yen. so–what to do, how to profit. real goods! I bought a co-op in Manhattan and I looked to gold (OUCH). I want to make a lot of money so I can buy a bigger co-op, mine is tiny. So if I think gold will go up, gold miners are more leveraged to the price of gold and should go up more. I bought Newmont Mines. But wait, there’s more. If miners go up, why not leverage it with NUGT. And I put a big portion of my total portfolio in it. I’m getting hurt badly. What do others think of the future for gold?
I think a gold ingot would make a nice door stop. But a brick would do much the same.
Happy to trade bricks to you for gold ingots of ANY SIZE. How many bricks would you like ?
Doorstop?
“In 1799, Conrad Reed…found a 17-pound yellow “rock” in Little Meadow Creek on the family farm in Cabarrus County, North Carolina. For three years, the rock served as a bulky doorstop. In 1802, a jeweler from Fayetteville identified the rock as a large gold nugget. He told John Reed to name his price. Reed, not understanding the true value of gold, asked for what he thought was the hefty price of $3.50, or a week’s worth of wages. The large nugget’s true value was around $3,600…”
Wikipedia
Tom, you were not wrong about the dollar a few years ago. Fortunately the Fed has pulled back on the madness (of currency debasement) since then, while many other central banks across the globe are now busy carrying on with it. Short term, there will continue to be downward pressure on gold prices largely because that’s in the best interest of the nations, central banks, investment banks, and influential billionaires who want to continue to accumulate gold at low prices. China and Russia especially have been buying as much as possible, but only in ways that won’t cause the price to rise – they want to keep buying in this low range. Individual citizens in that hemisphere also are buying a lot – they have much more traditional views of money than we in the West. Something is only as valuable as people think it is, and over there billions of people continue to think PMs are quite valuable…
Gold and silver have always been and continue to be a great hedge against financial collapses and downturns, more of which we can count on thanks to gov’t overspending and the high levels of speculative trading (gambling) that go on at the big banks – they know they’ll be bailed out when things go awry as in 2008, so there’s little restraint on their bad behavior.
But I think you need to look at PMs as long-term savings or insurance, not an investment. Junior miners are speculative plays for rich folks who can afford to lose every dime they throw at them.
Travis has mentioned that he has less than 5% of his portfolio in precious metals as protection against inflation, because all currencies go down over time. My percentage is higher but only because I’m more of a saver than he is (not very deep pockets, mine!). Since you are looking to make a lot of money sooner, you’d be much better off following Dr. KSS for biotech analysis.
Patricia, I have noticed several comments regarding Dr. KSS and was curious to know if the DR. offers recommendations for investing and if so where can I find a track record.
Thanks
Harley, if you go to the top of the page you will see an “irregulars” tab. Click on it and choose ” Dr Kss Page”. He has been submitting articles for a year now. He seeks to educate us and states what he has done but he does not give investment advice–do your own due diligence and make a decision. Do not blame him on any losses you may have. I, personally, have probably over 20 bio stocks he has discussed….not a great deal of equity in any of them so I don’t worry if one crashes, which has happened. There is no track record since he is not an investment adviser. He has not made a comment in apx 2 weeks—we are all worried about him and hoping he is on vacation and has not left us completely. If you are interested in any of his positions, you should probably wait until he shows up again with his latest ideas: he occasionally gives updates on his current thinking on stocks previously discussed….some have already gone up so much you may not want to buy, others are still simmering; most are risky—-it is biotec, after all.
Mary,
I appreciate you taking the time to respond.
Harley, if you are not an Irregular, you should join! For the sum of less than $1.00 / week, you will have access to the Biotech thread and weekly special Stock Gumshoe reports. The thinking of many of the experienced members / investors who freely share their thinking is worth the pittance of admittance all by itself.
A year ago I also was convinced that the Fed money printing would lead to price inflation
and that real assets and commodities were the way to go. Invested a lot in precious metals and commodity stocks.
The problem was that making investments on this last year was like trying to pick a bottom. I was early. And in the meantime, deflation became more of a possibility because the extra money is not entering the real economy. it’s just going into the stock/bond/real estate bubbles.
So…my outlook has not changed, I feel strongly that gold will eventually head way north of $ 1300. But if one is trying to buy metals or commodities on weakness, one needs to be unleveraged in case we are not at the bottom, and ready to take further losses, since the prices can go down further. I have taken some bad losses
this year but whenever I look at the historical prices, I find I would rather buy at these levels than sell.
With respect to the stock picks by James, I sniffed out a few of them on my own and I am adding at the current levels and will hold on, with the understanding that they are speculations. The info on the websites can be very interesting, and I have looked at drill sample results, reserve calculations, and also the investor and share ownership. In this regard Pretium is very appealing, I found that two of the main investors are Zijin Mining,
the largest state-owned Chinese gold mining company, and Liberty Mining, which is a subsidiary of Liberty Mutual Insurance. I surmise that the geology must be pretty compelling to have the Chinese government and an insurance company pony up capital.
Also the chairman Robert Quartermain is a legendary figure in mining and has a 2% stake. On another mining news web letter, Pretium was highlighted as a probable take-out candidate. My thought was that they are going ahead with operations on their own money, they seem awfully confident, so buyout or not, I want to go along for the ride.
The core samples were awesome.
Good commentary on Pretium and also applies to Continental whose price on drill result speculation was at one time over$10. and I bought when it dropped back to $4. I am not the least upset by its current price, it represents a fantastic buying opportunity IMO and indeed it would not have attracted the largest Chinese gold miner or a major insurance company unless it was a real bargain with proven management and excellent resources. I doubt that any investor at present prices will be disappointed in either their decision over the next year to 18 months. I expect to buy more of both at these current prices.
Wow, you could be my twin. I’m 65 and retired (that’s not why I say twin). I consider myself financially knowledgeable. I graduated from Swarthmore with Honors in Economics so think (though) I understand basic macro-economics. I have an MBA in Finance from NYU. I’ve followed the markets for years.
I have NEVER been a gold bug. Never bought gold stocks. I did buy 40 French Statue of Liberty Gold Coins at the big anniversary–not a great investment but not bad.
But a year and a half ago I looked at what the government was doing, printing money, blowing up the Fed balance sheet. And I decided it was destroying the dollar. But against what? The Euro? Europe had more problems than the US. Against the Yen? Japan was trying to devalue the Yen–I made a little money buying YCS the ultra-short yen ETF. So against what? Real assets. I bought a cheap co-op outside of NYC and a tiny studio co-op to live in in Manhattan. And for the first time I turned to gold.
I think if gold goes up 10% you make 10%. But if you are a miner and your cost is 90% of the price of gold and gold goes up 10% your profit goes up 100%. So buy miners, not gold. But I can’t really analyze gold companies. So I bought some Newmont which seemed like one of the safest with relatively low cost of production. And then I bought an ETF. NUGT. 3 times leveraged. And watched it go down from 52 to 9. Its now back above 11. OUCH.
Everything I know and everything I’ve learned tells me the dollar has to go down, and the Euro, and the Yen. And gold should go up. PLEASE!
The problem right now is the velocity of money. If you double the supply and cut the velocity in half it offsets itself. But wages are rising in China. Costs of getting minerals are not going down.
I hope you (and I) are eventually right, because right now I’m hurting.
GLTA.
Tom
tom , I have a lot of gold stocks in the red as well (for years) but I have invested more time in mining stocks and the markets than most. 6/7 mentioned here, and I’m not a Louis subscriber. While no one knows the future, and when those in control will begin to panic. There really is a lot of dots connected that historically foretell that a new currency system will happen and once that happens, we will begin to feel the effects of losing “the world’s reserve currency” hegemony.
When most of our “allies” joined with China’s new AIIB, last month, this to me seemed like is was not part of their planning ( those in control). This was humiliating for the US. THe IMF came out in support , as well as other key players. The petro dollar is another exposed flank supporting our dollar that will be altered later this year. Gold is going up in nearly all other currencies, and Asian demand is exceeding world production rates. Sept is on the calendar for changing the IMF’s currency basket to include new members.
Hold on to your gold and particularly silver, and diamonds if you have a lot to hold onto).
Seriously consider the possibility this funny money fueled global dilemma as corrupt, and now causing world wide pain with the strong dollar, and massive financial instability. Politically, its apparent we are not winning the ” New Great Game”, and increasing probabilities that after years of not being in position, other nations are being seen as very close to having a dollar alternative, and a commitment to make it happen.
Industries that provide necessities are another investment thesis, so will some of the emerging biotechs that hold such promise, but deflation is another financial flank the Fed is losing , and the markets will eventually succumb as earnings wane. Everything including the metals will fall like 2008, as anything that sells will be sold ( earnings are already showing weakness). Be careful to consider outside influences on your investment thesis. There isn’t a happy ending here, oh, and inflation happens too, as it has been now for a while. Assets will go down , necessities will go way up. ADM might be a great investment. There are many other good ideas as well.
Silver is money , or has been throughout history, so its return as money, if similar to past events, will also regain its rightful ratio to gold , potentially increasing 4X more than gold.
Travis, I hope you consider publishing this as the big picture really does matter to today.
People need to be alert to the outlandish rise in our currency and recognize this has high probability to be temporary condition, obvious in hindsight, when we get there.
Hi Tom. I have thought a lot like you described and have found for me what is a mindset that gives me happy medium on the gold/silver mindset. Maybe it will work for you, too.
Physical gold and silver I look at as insurance. I have found that I sleep better at night HOLDING some. Funny thing is, it was very very hard to spend the money to acquire, but after taking possession of gold and silver I do not worry about the fluctuations as I would a brokerage stock. WHether the price goes up or down doesn’t bother me with respect to my physical holdings. The stuff gives piece of mind, it’s only there in the event things really go to hell.
I have come to INVEST in the royalty companies. I have a long-term horizon, as I believe long term it is inevitable that there will be severe inflation, though a deflation may occur first. I will not get shaken out of these by short-term fluctuations, I will look to add to the positions. I like them because the companies make their living doing good due diligence on the miners, more than I ever could.
I SPECULATE on miners and producers. These I will trade in or out of. I like junior miners because it’s fun to go treasure hunting and the sector is one I believe in long-term.
But I’m prepared to reverse course on any of them depending on the circumstances.
Hey Tom. I drank the education kool-aid too. In my opinion the institutions of higher education are not, in total, creating real intellectual independence of thought. A lot of the stuff they taught us doesn’t work the way we thought it would. Like Keynes. Like applying free market ideas in markets that are not totally free. Like thinking material progress will solve problems of a political, social and moral nature. Like the inherent benefit free trade policies when the other side of the trade is not reciprocating. Like the idea that markets are efficient. Like the assumption that our democratically created institutions will act in the interest of the people. Like the assumptions that the central bank will act in the interest of the nation and that the multiplier effect is the best way to manage fiscal policy.
I respect your academic credentials. They exceed mine although I was educated in the same milieu of eastern liberalism. I have come to the conclusion that a lot of our problems have been created by policies based on theoretical gospel enshrined by
fuzzy liberal thinking and Harvard and U Chicago intellectuals, MIT quants, and Princeton math wizards. Our generation of 60’s love children grew up and did a lousy job, for the most part selling out to get our MBAs at Wharton and Stanford or realtor’s licenses and
making as much money as possible, while belittling religious values and promoting
atheism under the guise of freedom of religion.
Several of these ideas are foundering before our eyes
and have resulted in unintended consequences for which we are all going to pay dearly. In the real world these wonderful theories have been corrupted by greed and
the unavoidable exisitence of vested interest groups who will corrupt and modify the
benefits available from the well-intentioned policy initiatives.
Disclaimer: I attended two of the prestigious institutions referenced above and my father was a university professor. So I have been in the belly of the beast, so to speak, and was fully brainwashed as to the wonderful benefits of liberal education, which we are now
making every effort to bestow on everyone else.
I thought like you and acted last year on both metals and real estate. But we can’t time the bottom of the gold market, so the speculations there may pay off, but after we run out of patience. And I worry about what will happen to real estate when rates go up, as indeed they must. Someday.
Hold on to your gold and real estate and diversify into the other unloved sectors, like silver, oil, shipping, good foreign companies, etc. Each one will have their day as the inflation that is already printed and waiting starts materializing. Don’t worry too much about interest rates. They haven’t been going up because no one can afford it, especially the government which will go backrupt (unable to pay its debts) with even a slight rise in rates.
Patience is the key word. A lot of money will be made from those running out of patience. I have had moments of doubt but the way it works is that the moment one sells that’s when the bull will come roaring back.
All too true, knowing the market and cost of production requires foresight of “what will be” even if we cannot know the exact time frame. Better 6 months early than 6 days too late.
When the market finally catches up with reality the average investor will stand aghast at how quickly the mid-tier miners come roaring back. If you don’t buy when they are “on sale” the ship will sail without you. this may well be the buying opportunity of a lifetime and you will probably not get another investment opportunity of its magnitude in decades.
A question that we all wish we knew the answer or most of us anyway. Dear Travis/MR. THINKOLATER out of all the players which I commend you both for the diligence in preparing a Casey update who I consider a top tear good teaser with value. Sorry let my question slip away, who or which one of these or any others has the best chance to be bought out and are any of these Juniors next to any other miners that are doing well. I think you know what I am getting at. I would be very interested in that answer especially if the Thinkolater had some input with you Travis on that speculative question. Thanks ! Great Article!
Right now I own, or have owned all of them except one recently put on my buy list, (Integra) and my #1 pick for value and near term appreciation would be Continental which is grossly undervalued and well financed. Running close second as takeover targets would be Rubicon and Pretium. Have been in and out of Gabriel at a profit several times but until there is some movement on the part of the Romanian government it is a crap shoot even if very enticing at current price. If you have a long term horizon a small speculation may be justified and ultimately pay off handsomely. The resource is simply to big and rich to not get developed eventually.
Long PVG, Integra, Continental. Any opinion on Brazil Resources and Bear Creek?
I speculate in junior miners but have physical for insurance and asset-backed funds for
for insurance and investment.
@hendrixnuzzles
I know Bear Creek (BCEKF) is a solid silver play if you’re looking to spend just $1.25-$1.40 but has increased production and w/offsets, is profitable at $15 AG. I know a lot more about Brazil Resources (BRIZF). It’s CEO is the same CEO of Uranium Energy Corp (UEC), and BOTH very sage investments. Brazil Resources employes the ‘Midas Gold strategy’, whereby they are buying huge 2, 3.3, most recently, a 4.1M oz gold mine for absolute dirt cheap, with AVG cost of AU in ground / Market Cap = less than $6 per oz AU! They company BRIZF, has over 14M proven or Measured/Indicated gold reserves and all these reserves are strategically located near electricity and roads and if you don’t own ANY GOLD (physical or in miner format), the best and safest way to leverage yourself to $10,000/oz Gold by 2020 or sooner would be to buy BRIZF FOR .54/share. I love PVG, KLNDF, KAMINAK, CGOOF, DALRADIAN RESOURCES, RUBICON, KIRKLAND GOLD (KGILF), ARGONAUT GOLD (ARGNT) and Lake Shore Gold (LSG) and Guyanna Gold (GUYFF)
Thanks, Stephen !
I have a large allocation in metals, everything from physical bullion
to miners. Got a lot of juniors including BRIZF; although I suspect that BRIZF will pay off in uranium before it pays of for gold. Long and very high conviction in PVG and CGOOF.
Of the names you mentioned I am long several….but between
KAMANAK, DALADIAN, RUBICON, KGILF, ARGNT, LSG and GUYFF, which two or three are your favorites ?
Myron, Continental T-CZQ or Continental Gold T-CNL ??
Gold is in the cellar now and heading lower. Some day it will come back up; but that might not be for2 or 3 years from now. I’ve got a few coins and hope my grandson might find some use for them some day.
Gold is NOT in the cellar. Most of my life gold was $35/ounce and then it went ballistic
in the late seventies until now. I had $5,000 I could get my hands on in 1970 in Thailand,
and I could buy gold ingots from the local Chinese dealers in Udorn for $10/ounce
if I paid them in greenbacks instead of Military Pay Certificates (MPC), which was illegal
in Thailand at that time, 500 ounces of gold, had I gone to Singapore and put it into
a locked box, then not have touched it until 1978 when it went to $850/ounce…..I would have been well on my way to being a millionaire.
Gold is NOT in the cellar……but I think it WILL be…..maybe dropping below $50/ounce.
Back in those days I bought one ounce ingots of pure silver for $1.75. When silver went to $50/ounce, I made a killing……but it didn’t last. Now it’s $14/ounce and everyone says its in the cellar. Not until it drops to below $5/ounce will it be in the cellar.
Buy both of them THEN, when they hit the lows…..not NOW because you’ll just lose more
money.
ol/ Lawrence
Always keep your gold and silver in PHYSICAL form where you can access it.
NEVER buy silver or gold certificates….and NEVER put your gold and silver
in safe deposit boxes in a bank or savings and loan……because any organization
that is sanctioned by the FedGov can be shut down, the doors barred, and you have
no access to your wealth.
Always regard electronically accounted wealth in accessible accounts as ‘nonexistent’.
NEVER entrust your money (e.g. direct deposit social security) to an organization and never
keep it in electronic form. You HAVE to keep some script physical cash….but regard that like electronic cash….nonexistent, because the FedGov can declare the currency to be worthless overnight…..or devalue it to the point its not even worthy of toilet paper.
Own a piece of land outright. Build your own home on it and have the means to produce your own water, your own electricity, and your own food. Keep enough gold and silver on hand to pay your property taxes each year (by law, they HAVE to accept
gold or silver as full payment of property taxes…..not so paper currency).
IF everything collapses, as some are warning……don’t be a part of it. Hand your land
down within your family and provide for all your family no matter what the conditions.
And, if you haven’t already, GET OUT OF THE CITIES NOW!!!
ol’ Lawrence
Any of you ever listen to Dave Ramsey, the personal financial
advisor out of Nashville? He advocates getting completely out of debt
and to do so has you compartmentalize your income….then earmark and
name each dollar as to where it goes each month….and then work a debt
snowball….smallest bill up to the largest until you’re out of debt.
I also use a compartmentalized envelope system for investments…..be it penny
stocks or gold and silver. Each month I put a finite amount of money
in the envelope for each thing. I only spend the money earmarked for that category
on that specific category. Every 6 months of tracking the ebb and flow of the money
invested…..I weed out the under performers and reallocate the money I was
investing there to something else.
Other than oil and gas stocks, I’ve never dabbled in other mining……but, I am more than a little intrigued and encouraged by the potential for domestic THORIUM ore mining and
thorium nuclear power production. Anyone out there with any insight into the fledgling
thorium nuclear power play?
ol’ Lawrence
No insight into thorium…but I’ve read that there are over 500 new nuclear power plants in process worldwide that will use uranium. With the prices of crude oil, gas, coal, and uranium all in the dumper, would need to hear why the world is going to need another nuclear source in the near future…
Search this site for either “uranium” or “thorium” and you’ll find some great discussion and info on the future of thorium. It will be a game-changer, if and when.
China is building 25 nuclear plants with more in planning. The figure of 500 worldwide seems high. China needs to add about 400GWe in the next 5 years, as well as replace its 800GW or so of coal-fired plant, which is generally burning high sulphur, increasingly brown, and unwashed coal.
Nuclear is a clear choice, though it has created significant hydro, solar and wind generation too. Not enough to begin to meet the overall needs.
I believe China is most advanced now on study of Thorium nuclear technology. But there are certain difficulties still in ensuring its use as a definitive, efficient platform; so it will be some years before a thorium nuclear plant is real. China will not readily take a risk on this technology.
Enjoy your posts Lawrence, but later this year I will be doing the opposite of what you advise on where to live: like a fireman running towards the fire, I’ll be moving TO a large city, because I’m going to devote the time I have left towards saving our future generations from being drugged into oblivion by doctors, psychiatrists, and all other drug providers legal or illegal. The zombie apocalypse I saw begin in the late ’50’s is fully upon us: our children and grandchildren are being turned into zombies before they’ve even had a chance to begin their lives. We need to solve our society’s problems right in the heart of darkness which is causing them – not run away.
Brave but foolhardy in my estimation, Patricia.
Think the Lord will spare a city of minions of satan just because
you are in that city? He’ll send His angels to remove you
physically when He destroys the city….or, He’ll have His angel
stand beside you in the nuclear fireball so you won’t even be
singed! I have FAITH He will preserve His people, but you should not
tempt the Lord thy God by going into such places when He clearly admonishes
His people to ‘Come out of her (Babylon), my people!’.
The US is just going to get its just deserts for its many national sins….abortion,
blasphemy, following false gods, etc…..and it’s time to pay up.
I think we’re talking about a financial collapse before the end of October this year
leading into the 5 months of the Time of Jacob’s Trouble that ends with nuclear destruction of the US, UK, Russia, and all of Islam by the middle of winter…Groundhog Day 2016. With 2 Billion people killed by Feb 2016, the antichrist will arise out of Germany almost immediately and your currency and investments will be worthless. He will substitute his own worldwide monetary system and banking control. You don’t want to be a part of any of that IF you’re a Christian because he’s gonna seek you out and cut your head off for not worshipping him as god.
All of that colors my investing plans and preparations to survive the Tribulation reign of the antichrist on the Earth.
ol’ Lawrence
You forgot guns and ammunition. Everything collapsing would include the collapse of law and order.
Has anyone noticed lead prices?
I think you are forgetting an important basic instinct. People are only civilized as long as they have everything they need within their comfort zone! If everything collapses and large number of people are hungry, thirsty, and without money or shelter, do you think they will just come to the gate of your self-sustained Oasis and sit down and watch you and your family enjoy your solar system, food and your water supply? Have you seen Mad Max movies?
If everything collapses, no one will make it at the end. It will be a matter of sooner or later.
Interesting that if you consider the value of the dollar over this period, your 1970 purchase of silver is not so different in value from to-day’s dollar price. Your gold cellar price has also risen significantly over the period, though clearly gold’s performance has far outstripped silver.
In a recent column “Next Breakthrough”, when Howard Spiegel kindly pointed out that the Thinkolator’s rare hesitation had elicited the wrong answer, I have researched hard to try to figure out what might be the secret to imprinting integrated circuits on 3D print output.
Without success, I regret to say, except that I focused on one comment that a ‘special ink’ is inherent to the new capability (and possibly the jet which applies it). The ink is liquid silver. So maybe this will provide a significant increase to silver demand.
JAKE: You seem to be pretty positive about gold heading lower and I suggest you have been listening to “establishment bullion bankers propaganda.” Thats what they want you to think so they can pick up assets on the cheap. What fools people is the temporary strength of the U.S. dollar due to the problems in Europe, Japan and Russia. In actual fact, compared to other currencies, gold, has done quite well with higher lows and higher highs in most, while moving sideways in U.S. dollars in which it is currently still priced for the world market..
the real problem with the Casey letter expose, as indeed also with the dimsum selections by Gumshoe’s own Dr KSS, is that there are too many stocks one would have to research and rank and consider buying, and no way to figure out their likely returns. Obviously, the only “free” tip from Casey is a large cap which will be easy to pile into. But the others are mini-caps developing speculative projects on which there are serious managerial and execution risks. And getting in and out is costly. Same with the biotechs from Dr. KSS.
I wish, I wish both of them would create funds which would let non-experts jump into a single bunch of shares with one single click of the mouse. I am not sure either would meet US regulatory rules but they should be able to use their expertise to get a fund group to create a Casey or an Dr RSS fund
Good grief Vivian, are you trying to pick a fight here? Like you I’m “persona non grata” on Dr. KSS’s threads (he’d consider me part of the “cracker barrel” natural health crowd), but how can anyone argue with the outstanding results of his analysis? No matter how much I disagree with anyone on any one thing, I always give credit where it’s due.
Uh oh, need to make a correction (I’m not the only one in the household who reads this site, just the only one who posts on it) – it’s been pointed out that I only responded to Vivian’s first sentence. If you read her entire post carefully to the end, you can see that she is acknowledging Dr. KSS’s expertise – so much in fact, that she’d like him to create a fund for which he does all the thinking and work. Actually though he and his thread subscribers are a team who continually contribute themselves, a few even maintain spreadsheets on the stocks he’s covered, which any subscriber can access. (Why would I encourage people to invest in biotech when I have a few ethical reservations about some of it? Because working class and retired people have been repeatedly screwed by our fiscal and financial systems – and this is one of the few places where you can actually make real money right now – financial security for you and your family is as important as anything else.)
Ok, everyone is this home has promised to not even look at this addictive site for a full week – too much to get done around here. Such great comments just on this thread alone! Looking forward to next Thursday to catch up with them.
Love your attitude Patricia. This is the best 50$ I spend each year. Only just getting into stocks and only have a small portfolio made up of Intel, Cisco, Sand, One share of Market bought at 420 dollars. wish I just plonked down 5K at the time. GLW and a couple of small mining shares. Sitting on 10 times as much cash at the moment spread 50/50 between AUD and USD. I am keen to invest more in the market but also dont want to jump in now. Been waiting 7 years for the next bubble to burst. (Austrlian Property has never gone down since 2008) Getting harder and harder to remain patient.
BTW I work in the Mining Industry mainly gold and a bit of copper. I started when gold was 283 USD oz and costs of production 123 oz. At the moment nearly all large miners have sustaining cash costs of greater than 1000-1100 dollars. Continued decline in gold to 600 oz would decimate the industry. Given the worldwide currency war in play at the moment it is hard to see Gold collapsing. I am sure there is a black swan moving my way just cant see it yet! When it gets here I want exposure and for me that is SAND and SLW. Plus buy a house for cash in Australia and have no debt.
Patricia…day are you swing trading UEC these days ?
Just popped to 1.80+ from its range in the 1.50s…and 12 % short interest out there…
There are a lot of stocks recommended but several of them have share prices so low you can take a pretty good position on several, share-wise. I looked in more detail at a number of the junior stocks stocks that were suggested, and took positions on what I felt were the four or five best ones: I am long Pretium, Continental, Integra, and Klondex. I think Pretium is in a class by itself, an investment more than a speculation.
Production is scheduled for 2017 so it’s a long term investment for sure and I am happy to accumulate it under $ 6.00
I am also long Bear Creek and Brazil Resources.
Admittedly these all depend on the price of gold and silver. Of course prices can go lower, but I just see a lot more upside than downside.
Since I think gold and silver will go higher, I also have positions in several royalty/streaming companies, as well as physical. The streamers (SLW, SAND, RGLD, FNV) I look at as investments; the physical stuff, I look at as insurance; the junior miners, as speculations.
The transaction costs and premiums on physical are too high to consider them as investments….they are hard-core savings and end-of-life-as-we-know-it insurance.
In terms of junior miners (including some mid-tiers) one of the best bets might be Sprott’s recent Precious Metals Miners ETF (SPGF) which is weighted using a valuation model for ranking as opposed to simple market size. I can identify with Vivian’s dilemma of having to evaluate hundreds of juniors to come up with “best buys” but that is what I have chosen to do, and i am looking forward to getting back to it. I note that a few months ago Louis James had a slightly different list of key juniors and I could certainly pick a different seven quite handily, there are some insane bargains you there. You just need to be sure the companies management has the resources to survive until the market validates the value of their projects.
Below are drill results from Integra Gold released yesterday, courtesy Casey Research .
I am not a mining engineer but I have seen that deposits with low single digit grams-per-ton can be viable, so these results look pretty juicy. Plus the mine is in Canada…pretty good jurisdiction for politics and stability, to say the least. I’m long.
______________________________________________________
INTEGRA GOLD per Casey Research
Significant intercepts reported today from the Triangle drill program include:
TM-15-01 (Zone T7) – 14.78 grams/tonne gold (“g/t Au”) over 2.0 metre”)
TM-15-02 (Zone T1) – 14.79 g/t Au over 10.0 m
TM-15-05 (Zones T0 and T10) – 8.01 g/t Au over 4.5 m and 11.47 g/t Au over 8.0 m
TM-15-06 (Zones T5, T10, and T11) – 7.00 g/t Au over 7.0 m, 5.19 g/t Au over 5.0 m and 11.78 g/t Au over 1.0 m; and
TM-15-08 (Zone T10) – 15.55 g/t Au over 5.0 m
8 drills currently operating at the Lamaque Project, with 5 in operation at the Triangle deposit
Thank you, and kindest regards from here in Canada.
Maybe the future of gold is too speculative to consider seriously at this point. Perhaps copper or silver or other metals that have industrial value would be worth more serious consideration.
I agree that the future price of gold is a speculative matter…however when one looks objectively at other investment vehicles, they are also pretty speculative.
UTILITIES…see what happened last week ? Guess what happens to your “safe” utilities
when the Fed raises rates or there is dollar inflation !
INDUSTRIAL COMMODITIES: depend on general economic conditions. Wanna bet ?
BONDS: What happens when interest rates rise ? There will be a bloodbath.
CURRENCIES: Own any Euros ?
FINANCIAL SECTOR: Same problems on interest rates. Say, ever hear of AIG ?
REAL ESTATE: totally propped up by interest and tax codes.
So tell me…which are the investments free of speculation ?
Free of speculation?
Warning: the following is not PC:
This reminds me of the ancient Lenny Bruce routine where he gets a wish granted by a genie. He says, “I’d like some income property!” and bam, the room fills up with 50 beautiful women.
Love it. Also a mark to market product that will always be required and be in use. If you get a brand and moat you could sell it to Buffet.
Repeat business…wide market appeal…built-in advertising…
huge markup
Good point, in fact I practice that, I have chosen winners over the past 2 years, in diamonds, zinc, copper, uranium, lithium and graphite to name just a few. check some of the back issues of Stock Gumshoe and you will find them.
“A gold ingot makes a nice doorstop” Where do you live?
Yeah, but with gold coins you can sit at the table and stack them and stir them around like Scrooge!
I don’t worry too much about the price of gold ’cause I don’t sell any.
Let my grandkids worry about the value!
HAR de HAR!
Exactly – who cares about the current price in the long run? Here’s one way I explain my position to doubters: Imagine you’ve just inherited the old homestead that great-grandpa built. The thing is dilapidated so you decide to just tear it down and rebuild. Fortunately, you’re doing the demolition yourself and are alone when you find this: great-grandma and grandpa didn’t trust banks, so they kept their life savings, $12,000, cemented up inside the stone fireplace in their bedroom. Here’s the bad news: half of it was in paper currency, now worth about 5% of what it was in 1914. Here’s the good news: the other half was in gold coins.
Some have been killed in accidents or passed away without ever telling anyone where their “stash” was, and some old home demolishers have benefitted (not always the owner).
Good point and whatever it is…you can’t take it with you !
I’ve speculated before as to just how many hoards of gold were buried somewhere in the basement or back yard when FDR made ownership (“hoarding” as he called it) illegal in 1933 and confiscated everyone’s holdings, which are still there because the owner “passed on” without ever recovering the treasure.
yes me too and lots of people die when they least expect to
Generally this period of deflation should see gold going lower. The monthly gold graph in Dollars does not have any strong supports left until $900. So unless a weak one forms meanwhile it does not look good. The chances of a game-changer are not good, but at least they are imminent. The mechanism for the fixing of the London gold price changes on 20th March 2015 to one which sees control pass from US and US friendly banks to the Bank of China and its allies – who probably have a vested interest in seeing the price of gold rise. Keep an eye on gold after Friday.
Before deciding to take a major position (for me) in precious metals, major miners, junior miners, and royalty companies, I worried considerably about the possibility of price deflation, which is clearly a threat.
My conclusion was, and is, that even if the nominal price declines, and there is a general deflation, the relative value of precious metals is still likely to hold up versus the many other investment vehicles and commodities that are available to us. Bonds will naturally continue to go to the moon…but only until the day it is apparent that inflation is upon us.
This can happen suddenly. Remember that STORE OF VALUE is an important consideration.
I think that things may have changed, insofar as it is possible that commodities may be a LEADING indicator, and that we may have already taken the majority of the beating. I just don’t believe that fiat currency can be created without limit for an indefinite period without a sea change in sentiment at some point,followed by price inflation, loss of confidence in paper and electronic financial assets, and a flight to real assets.
Also the world is becoming more and more dangerous, the financial markets more and more interconnected and complex, the leverage is higher than ever. So a Black Swan
event seems more and more likely, although the exact prediction of what and where is impossible.
Well reasoned, all of you Gumshoe readers would benefit from reading Jim Rickard’s book, The Death of Money even though that is misleading. ONLY Gold is money, everything else is credit, or stated another way, only gold is honest money because it can maintain its purchasing power. An oz. of gold is always an oz. of gold while the purchasing power of paper currency is manipulated and debased at will by politicians. Goldcan not be created (conjured) out of thin air at the whim of politicians and bankers, their creations are merely currency (IOU’s) having utility as CURRENCY, but they are not money unless backed by hard assets.
Dollar: US government saying IOU nothing.
Euro: I DON’T-KNOW-WHO that says IOU nothing
Well Travis, as you can see there’s still a lot of interest in this topic, I wonder if you’ll ever find another Myron – or if he’ll come back when commodities are trending up again. I only put a tiny amount towards juniors at any given time, no more than my parents used to spend on a Las Vegas weekend, and I expect about the same results, but articles like this one do increase the odds! Thanks for providing an opportunity for the few of us who like to blather on this subject, but I promise to sign off until this weekend and leave more room for others to opine here.
If I remember my geometry correctly, “vertical” can also go straight down. There may be a floor, but in reality, if no one wants the yellow metal any more and starts turning in what they own of it for cash, the floor may become a trap door. This is like the feeling you get when you tour a gold mine as I have…it doesn’t appear to have a bottom. For those who would argue whether it’s better to have gold, cash or land to pass on to the heirs, I would suggest instead to consider debt. There is a good chance that it could be forgiven or settled for pennies on the dollar. Besides, our gummint has been doing this for years, to the sum of $17 trillion and counting, for those of us who can count that high. That, by the way, is more than double the value of all the gold produced in the world to date.
It is true gold can go down. But I think it is doubtful that 1.5 billion Chinese or 1.0 billion
Indians or 900 million Arabs are going to change their attitudes about what is real money,
no matter what the Ivy League economists want them to believe. There are also many Americans, Europeans, Russians, and South Americans who also believe in hard metal assets as protection against government policies, chaos, and general disaster.
As for debt, I agree with you somewhat, in that debt is an asset if there is severe inflation. So it is a valid hedge, as far as I’m concerned. The pertinent question is, if you are going to go into debt, what are you going to do with the borrowed funds ?
One possibility is to pay the entire cost of my grandchidrens’ education at a good university. Yes, they can get their own debt via student loans, but why saddle them with a huge debt to pay off when they are just starting out in life and least likely to be able to handle it? The irony here is that it is very difficult to get student loans forgiven, unless the debtor is deceased.
Great psychic income, but a rotten investment.
Higher education will be the last bubble to burst…the costs are ridiculous and the benefits are for the ego (save for the technical fields) for the value received. Better to invest the money $ 200,000 in a life insurance policy in their name and they can retire in twenty or thirty years, and let them earn a living in the meantime. Or fund them in starting a business. IMO the “liberal arts” higher education business is in the main a luxury consumption article. It is horrific that we are trying to give “everyone” the opportunity to spend $ 50,000 a year to study useless subjects, do what teenagers do unsupervised, and then arrive in a dead market that has no use for their acquired knowledge.
As far as developing the ability to think and reason…the atmosphere on many campuses are the last place you will find independent thought, especially on social and political issues. It is awful that we induce millions of kids to take on debt amounts that they do not really understand. Or worse, pay for it and give them a free ride they do not appreciate.
I drank the kool-aid like everyone else. I went to two Ivy League schools myself and was the very proud parent when my girls won top prizes in the admission lottery sweepstakes. But they had to borrow and work to go, I think it’s important that they want it badly enough to work for it. Otherwise, why should I pay for it ?
Hendrix, you pushed my hot button. The universities have become the largest con in the nation. Here’s my take. Pre-moderns believed in objective truth but also that cognition has inextricable objective and subjective components. The moderns realized that the subjective element gave religion its hold on the public square, so they redefined truth as purely objective and made Newton’s physics the foundation of knowledge. The post-moderns have discovered that doesn’t work and have redefined truth as “purely subjective”–that is, non-existent. That doctrine now totally dominates and corrupts the academy. The “truth” is that without God there is no truth. So we’re gonna see a civilizational as well as financial collpase. When that happens even gold won’t do us much good.
METALS AS CHINA SEEKS COMMODITY SWAY
By Bloomberg News – Fri, 27 Mar 2015 10:05:53 GMT
(Updates prices in the second paragraph.)
(Bloomberg) — The Shanghai Futures Exchange started trading nickel and tin, offering the same main contracts as the world’s biggest metals bourse in London, as China seeks to extend its influence over commodities prices.
Nickel for July delivery on the first day of trading Friday fell 1 percent to close at 101,080 yuan ($16,268) a metric ton from the base price of 102,070 yuan, while tin for the same month retreated 0.8 percent to 119,270 yuan. Volumes for nickel and tin were 28,860 lots and 1,798, respectively.
China, the top metals consumer, is trying to cement its influence on commodity prices with new contracts including gold and oil while opening up trade to foreign participants to internationalize the use of its currency. Nickel and tin, the worst performers on the London Metal Exchange this year, join Shanghai’s existing futures for aluminum, copper, lead and zinc.
Exactly why, when the Ponzi scheme that is the Federal Reserve Act finally collapses of its own weight, gold will have to increase to cover all the worthless paper that has been created and circulated as if it were real money. The chickens will come home to roost, the problem is we just don’t know when. I have seen estimates that the price of gold could reach as high as $10,000 to match the currency that has been artificially created (counterfeited) but I will happily settle for half that in the next 2-5 years. The KEY is being positioned in advance to reap the long overdue rewards. The present situation reminds me of the biblical story of the Israelites exodus from Egypt. They laboured as slaves under harsh conditions for decades (as we do under a fiat currency system) yet ultimately they got paid as the Egyptians showered them with gold, silver and precious jewels just to get rid of them and the plagues from a just Creator protecting His people. Could happen again when honest money is restored and gold and silver are recognized for the value they have been known for over thousands of years.
An Old Testament hard money guy. Right up my alley.
I’ve seen estimates from $ 2,000 to 20,000 per ounce, but as another commentator remarked, prices are being manipulated by the “Big end of town”, so who knows what stunts will be pulled to discredit the shiny yellow stuff. The Powers That Be discredit
gold as money but behind the scenes all the central banks are building reserves, so I ignore the rhetoric and just watch what they are really doing. If they really thought it was worthless as money, then why are they holding any reserves at all ?
The folly of it is that wee are just making gold cheap for the Chinese and Indians, who show no signs of changing their minds after 5,000 years about the value of gold. They are buying as much of it as they can with the worthless dollars we print for them to buy flip-flops, clothes, and everything else….while we simultaneously try to keep the price low. What a joke.
Gabriel has been bogged down in Romanian politics for several years. That, and the huge capital costs make this dead money for the foreseeable future. I think it’s more likely that James is pushing Dalradian. If your interested in junior miners with potential to become a producer, this one deserves a look.
That said, I’m a little wary of anything recommended by Doug Casey and Louis James.
John is right, in the previous list by Louis James Dalradian was listed and Gabriel was not. Maybe Louis knows something developing behind the scenes in the case of Gabriel i am not yet aware of, no doubt he is better connected than I am, so will investigate further.
Gabriel is still not on the list……….
hello there, how much does it cost to produce 1 oz of gold? @ 1000$ , so can gold go below that for long?
The all-in sustaining costs vary quite a bit. My understanding is that some producers
can deliver for under $ 700 per ounce, but most have higher costs.
Also I get the impression that miners can alter somewhat the selection of ores based on current prices, cutting back to only richer, easier ores when prices are low, and expanding to less rich deposits when prices are high.
The recent drops in oil are helpful to most producers since energy use is high in mining. So it is a question that needs to be answered on a mine-by-mine basis.
Not unless the cost of mining goes down. Oil will help for a while – but not for long.
Good point, varies among miners, but if gold falls below $1000. it will be because the bankers manipulate it down through propaganda and illegal activities for which they have already been fined billions (license to steal) considering the profits they make in both directions. If it does happen, and I concede the possibility, it won’t stay there for long from a simple “supply and demand” perspective. If the price is manipulated down below the cost of production then mines will be closed and production stymied below demand resulting in price rising. In other words those who don’t act now to acquire at least a 5% to 10% stake as a minimum allocation may have difficulty acquiring any if they wait too long to make up their mind until price has already ben run up substantially. He/she who hesitates is lost.
on finviz pvg as divd. % of 28% how is this possible?
Must be a gremlin in their system somewhere, I don’t believe Pretium has ever paid a dividend.
Vivian, There are royalty companies in the mining industry who provide small Jr. companies a source of funds necessary to bring the small projects through the process of developing a mining operation from start to finish, with finish being a property that contains a well defined deposit that the larger companies would like to purchase. The royalty companies supply the money in exchange for stock in the company. Often they will also buy the deposit and take it to production to get a larger income. Royalties usually have one or more income streams from some companies which they finance, and you can purchase realty shares and reap some of the income, often at a nice rate of return. Sprott, Altius and Sandstorm are a few of five or six in the mining industry that you can look up on Google.
Ray
Vivian, Correction
Change realty to royalty shares in this sentence, “you can purchase realty shares”
Ray
Vivian,
Check out Kitco.com article re: Sandstorm Gold, 4th quarter and annual reports
Yes it is interesting that Sandstorm showed a cost per ounce of $ 439 because of their deals… which is lower that the typical cost to mine the stuff
Over 40 years ago I had $3000 I decided to invest. I saw that the government was inflating the money supply, so I invested in gold and silver and real estate. Within 6 years I had made my first million and commited myself to maintaining a porfolio of prescious metals stocks in a range of 10% to 20% of my total stock portfolio, buying when the percentage fell below 10% and selling when it exceeded 20%. That simple decision has netted me more capital gains than any other assets that I have, and many millions that I have used to purchase other assets. What some of you wise experienced gold bugs are forgetting is that the value of gold doesn’t really change much relative to the material world, it is the value of the currency that you should be examining. The dollar is King right now, and the stock market at all time highs, because there is no confidence in economic investment. (Thank you Obama! Your plan to dismantle the American Dream is working!) If and when people start believing in the dream again, and start spending and investing again, watch the effect of all those dollars chasing the still diminishing material resources and the resulting price inflation. Another way to remember (and there are several others!), $35 gold was when the dollar was tied to it. (Dollars then were as good as gold!) That same ounce of gold takes about 1000 of today’s dollars to produce and will buy about what it always has (like a good suit). I would not bet on the price of Gold going much below $1000. If so, I will just be buying more.
With your results you can open a newsletter !
The government is increasing the money supply like crazy and all the other major currencies are joining the bandwagon.
So what do you recommend this time around ?
Thanks Hendrix and AK for your comments. I don’t generally participate in these blogs, but appreciate receiving the thoughts of others, so I guess I owe a response. My first million was a combination of moves that I would be happy to retell, but more important would be to transmit a summary of what I learned and still practice. I actually haven’t bought gold to sell or trade, except as stocks, futures and options. As an investor, I now buy nearly everything to own it, meaning I don’t have a time frame ( a big advantage that us small guys have). But I also create or put in a sell order to sell part of my position when I buy it. This shows me my expectations that I can adjust along the way. I buy what I see as cheap (unwanted) relative to itself, its history, and all other investments. The relative values of things go up and down, and each investment has its own wave. So basically, starting with an examination of what is going on in the world, especially governments and those that pay for them, I just sell what is up and buy what is down. To make this work without having to be overly attentive, I am very diversified (well over 100 positions). But I now mostly use stocks to trade because they are easy and quick. And because I know I don’t have a lot of time and resources to know what so many other “professionals” already know, I generally prefer high beta small caps with historically low PEGs. I generally only buy blue chips when the stock market is crashing. So my predictable answer to your question, I have been selling mostly blue chips and buying real estate, and precious metals and oil related stocks. I buy and sell stocks in increments, and rarely let a position exceed 1% of a portfolio. And when I place an order for a relatively high risk position, I generally place an order an equal amount of a low risk stock. These are all methods to avoid emotional decisions or reactions and to check my own thinking. I have made plenty of mistakes, but as an example of how my method works, during the “lost decade” 2000 – 2010, I averaged better than 100% return per year on my stock porfolio.
Could you share an outline of your diversification ?
You said you have about 100 positions…how many sectors are you in, and which ones ?
Happy to be the first subscriber to the MERarts newsletter…
Thanks
Thanks for your question, and confidence, But I am not available / have the time to be responsible enough to give advice to others. I actually spend very little time watching investments these days. To talk about diversification, I will need to start another comment since these replies keep getting narrower and using up more space.
Gold was $160 in 1975 and went to $460 in 1981, according to http://www.nma.org/pdf/gold/his_gold_prices.pdf
So if you bought it for $3000, it would have gone up to about $ 9K by 1981. How did it go a million in 6 years? Did real estate rise so much to give that kind of return in 6 years? Phenomenal, if true!
Your observation and assumption are generally correct, and most of my first million wasn’t made in gold. But when you are using proxies (i.e. mining stocks, options, futures) and actively buying and selling (and paying attention!), it is quite possible to get 10 to 20 times your investment in a very short time. (Some of Casey’s recommendations in that period did just that.) But that kind of inflationary market may not return for many years, even though all the pieces are in place. Just look at a gold price chart 1975 – 2015:
http://goldprice.org/gold-price-chart.html
It looks like we could be in 1982 again looking at 20 years of sideways movement, but I don’t think so. The government has been monetizing the collapsed debt market, and the President has done nothing to restore confidence (quite the contrary) as every other president has done (Lok at what Regan and Clinton did facing much worse circumstances). When people realize that we have been printing trillions of fake dollars that are supposed to represent real goods. and when the flow or velocity of money starts circulating outside of financial instruments, look for runaway inflation. No government in history has been able to print money the way ours has and survived. But as some have suggested, that may be the plan. After all, Obama is only alive because he is doing what he is told to do, and as the most brilliant man I have seen in that office in 50+ years, I have to say he knows exactly what he is doing.
Agree with you completely. A few things to add:
Much of the “money printing” isn’t even printing, it is simply an electronic book
record by the Fed, this is creating “money” out of thin air, not even paper. So there is no limit to it.
I was thinking about the Fed mechanism for increasing the money supply, and concluded that one of the reasons the real economic impact of so much “stimulus” is so pitiful is that this money is mostly going into financials and real estate. So the spigot is open to the hose, but the most of spray is being taken few people standing in front of the nozzle. Also the people with most of the wealth do not need to spend, so the velocity of money is slow; and I recently saw an analysis that indicated that money velocity was collapsing to a level similar to the worst time in the 1929-1945 depression.
What I am puzzled by, maybe you have a point of view on it:
When inflation starts, nominal rate increases should be strong for the dollar…but if everyone wants to get out of the dollar, why would the dollar strengthen when everyone knows its actual value is headed lower and maybe even towards collapse ?
Beyond that, it isn’t just the Fed that creates money.
Every time someone borrows money from the bank, the bank creates the money by crediting the customer’s bank account and making an offsetting debit on their books in “Loans Receivable” so that the money is created out of nothing. In that case, whether money gets created by this means or not depends on how confident borrowers feel about paying it back, and how sure they are that they can invest it and make a good return, assuming they aren’t just buying some shiny new consumer goods.
UNFORTUNATELY gold is being manipulated by the big end of town. They get away with this and then a few years later when they are caught they pay a piddly fine and no one goes to jail. However they have made billions in the process.
When one member from the big end of town has derivatives far in excess of all the gold in the World the they can short it any way they want. I remember when the price of gold started dropping an a big player dumped 40 million on the market. But not one ounce changed hands, not one share transferred, but it was enough to start the slide to where it is today. These guys also made on big bucks on the short. The mug punters like us that bought into it got hosed down on the pump and dump. Remember gold was going to 2000 bucks and ounce and it was going to save us from the FED and their amazing ability to print money that has no value?
So friends maybe if you get in at the low end you will make some bucks but with the corrupt system we have now I am out of the market.
I still have in my bottom bottom draw a few shares that in the distant future should increase in value just by inflation.
Honest question: so what vehicles do you like for safe money ?
Aha! Capitulation! Just as gold tests its Nov 2014 low and rebounds (up to $1,182. as of Friday morning, March 20 2015) without reaching a new low. And on the first day of Spring after a long, desolate winter, too! How’s that for symbolism, eh?
Perhaps God really is in Her Heaven and all’s right with the world after all!
Greetings and Happy Springtime to all from warm and sunny Canada.
RB
Rusty, this might be viewed as good news :
ICE to replace London gold “fix” from March 20 – LBMA
No capitulation here…had to grit my teeth while the bottom was tested this week….but
stepped up for more Pretium and Sandstorm. And my question is still there…where else would you rather put your money ?
Looking to come to Canada this summer…it seems like my investment paradise.
English speaking with a touch of Gallic…tons of real estate…and lots of out-of-favor mining and resource companies !
Best regards
I also have worries about manipulation when the “Big end of town” is Wall Street and City of London. But sooner or later the big end is going to be Shanghai and Mumbai, and anyone shorting what they are buying will come to grief.
Et All, my two bits……all the hype letters have lead me to a PM loss as well, BIG. I’m following Brent Cook, a 30 vet of buying mining companies; a Geologist. Of the many interviews I’ve listened to he admits failures and successes, why he avoids some plays although they may turn out well, why some are worthy or not simply by the lay of the land and/or the country, politics etc. I think worthy of all having a listen……of all the stocks spoken of here, the only one Brent has commented on as viable is Dalradian DNA.T. The others he has not reviewed that I am aware of. If anyone has read or listened to otherwise, pls advise. Thank you!!
Patricia…..looking forward to your return on the weekend, smiles!
Question, Patricia…Did Brent mention the others and not consider them viable ?
Or is Dalradian the only one of the group that he has mentioned ?
If you are a subscriber to Brent’s newsletter, maybe you can ask him to comment on a few of the stocks recommended.
I’ve seen Pretium held in high regard in a few different places…one thing that I did in respect to Pretium was to get into the website to look at who has invested in it,
what is the track record of the management, and what evidence is there of compelling
geology. So at this point, I have conviction about the company.
Of course could could crash and all the recommendations on gold miners by everyone in the world could be wrong.
One thing I’ve learned is that EVERYONR has an opinion, but NO ONE really knows what is going to happen and when. We read, reason, listen and interpret, then form opinions based on what we see, and then take our chances. When something happens, some of the people were right and some were wrong…
meant “of course gold could crash and all the recommendations…could be wrong”
hendrixnuzzles, I believe it was me commenting. I added my two-bits only as FYI only. Brent is interesting to listen to, no hype just calls it as he sees it. I do not belong to his newsletter. I read articles or interviews posted on the Gold Investing news site. I mentioned Dalradian as he brought this PM up as a play he is interested in, and since it was referenced in this article, I mentioned it. Perhaps my wording was wrong, my apologies.
As for Pretium, I do not know if he has ever commented on it.
I know nothing nor have an opinion…following the thread like everyone else and hoping to learn, obviously or I wouldn’t be in the red on my PM.
Thank you for the response…there’s nothing to apologise for.
Most of my PM investments are off, but my attitude about them has taken a marked turn for the better since I have put them into vehicles I do not need and cannot touch short-term. I think our emotions are our biggest enemy and we lose the patience that should come with our convictions if we become too leveraged or overconcentrated in an investment.
Financial advisors keep harping on “the long term” to calm down stock investors.
Well, I think we should do the same on the precious metal investments. I also find some security in owning physical gold and have found that what I paid for it does not affect my comfort in having it.
Brent was on BNN recently and is always interesting to listen to. Here are his top picks from the program. http://www.bnn.ca/Video/player.aspx?vid=563719
I prefer HardRockanalyst to anything that Casey publishes. Coffin, of HardRock, is involved in Precipate Gold Corp, a company exploring in the Dominican Republic, and is a company that interests me..
Following Brent Cook, SINCE…. loosing BIG not because of.
“losing” Lulu.