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Cramer is on TV raving about Yamana Gold (NYSE:AUY) but I think he's nuts! The stock just jumped 5% on his mention after dropping 5% for the day. They hedged all of their production through 2007 which is quite a gamble, but it is secondary to the gold mining operation.

I don't see the 1.3M oz gold projections to justify the $2Bn market cap. This company is up 250% since November and the strategy of hedging copper to lower gold production costs will blow up in their face if the price of gold drops $80.

I guess my real issue with these guys is that they are pre-selling copper to raise cash to cover a $12M burn rate but the CEO is taking a $900K salary with another $1M going to other officers.

Meanwhile, the Northern Dynasty Minerals (NYSEMKT:NAK) executive team save money by taking $57K for the CEO and $43K for the CFO. NAK is sitting on deposits that you could throw all of AUY's holdings into and not notice. NAK's market cap? $500M.

It should be noted though that NAK is a 401K play as production is still 4 years out. I have been buying this on dips for some time, but those dips have been getting more expensive each time!

Source: Yamana Gold's Risky Strategy May Blow Up in Its Face (AUY, NAK)