Seeking Alpha

Smaller gold miners remain attractive as acquisition candidates

  • The rally in large gold miner names (GDX +0.8%) may have gotten ahead of itself as the companies still have plenty of work ahead of them as they move to repair balance sheets and focus on cash flow over growth, writes Liam Denning. The smaller miners (GDXJ +2.7%) have rallied faster this year, but they fell further last year, and their attraction now would be the potential for deals - the larger players are pushing off projects, and thus need another way to replenish resources.
  • Not all are good targets, but those with projects closer to completion and for higher grade ores are most attractive, says CIBC's Jeff Kileen, highlighting Continental Gold (CGOOF +0.5%), Premier Gold Mines (PIRGF +1.1%), and Pretium Resources (PVG -0.8%).
  • Other smaller players with attractive projects starting up this decade include Asanko Gold (AKG), Golden Queen Mining (GQMNF +0.6%), and Orezone Gold (ORZCF -0.2%).
  • ETFs: GDX, GDXJ, NUGT, DUST, GLDX, JNUG, RING, GGGG, JDST, PSAU
Comments (7)
  • Brian Bobbitt
    , contributor
    Comments (1888) | Send Message
     
    Business will always play monopoly as long as they can get away with it. When I played the game, I bought property no matter what the price. It was not always a good idea, but overall, it works big time. When times are good, IPO's, M & A's always top the news.
    One thing bothers me, copper is still languishing.
    I don't know much, but I do know that in good times, we use a lot of copper. More now than ever.
    Copper supplies are simple to follow: http://binged.it/1pfxeoP

     

    I feel that the 2nd shoe has been kept from dropping due to the fact that our government continues to "cook the books", showing much better activity than is actual. Inflation rate being top of my list.

     

    One can simply, in this age of computers, data and information, ask any question he wants an answer to into his cell phone.

     

    Check it out. Why are copper prices so depressed? I say it is simple, lack of demand.

     

    So, with that bit of negative input, I still say, Ag Eagles are the best way to go for now.

     

    Capt. Brian
    The Last Navigator
    20 Mar, 01:46 PM Reply Like
  • alcamo1940
    , contributor
    Comments (137) | Send Message
     
    Captain Brian, I have to say, I really enjoy reading all of your comments.

     

    I feel, as I think you do regarding the PM's, they will go up, just a matter of time! I sleep better at night.

     

    Can I ask your opinion about the miners at this time? What are your thoughts, for now, and longer term, say a few years out?

     

    Sal
    20 Mar, 02:18 PM Reply Like
  • june1234
    , contributor
    Comments (2490) | Send Message
     
    Someone got that memo early. GDXJ has gone up a lot more than GDX has today and JNUG is up 7% today. Copper on the other hand is just languishing, for now.
    20 Mar, 02:22 PM Reply Like
  • phdinsuntanning
    , contributor
    Comments (1199) | Send Message
     
    Capt and crew. Sorry to say it but I think this is the part when totally broke and deeply indebted Chinese business ladies and gentlemen are starting to use their gold savings to rescue their companies from bankruptcy, or jump from their skycrapers (happening in London), leave mainland in a rush with the gold in a bag or a combination of the three above. A fire sale at any price is happening in Hong Kong real estate now and they will not de-leverage US Goldman Sachs Treasury 2009 style as there is not bailout from the Beijing blue dress and red tie peoples interest guardians, that really deserve some respect from me on their tough example to us. So boys and girls, prepare your cash. On copper, Cap, there is "almost zero" warrants available for physical buying in the LME or COMEX, it was all moved to Shanghai SHFE or bonded in the Free Trade Zone area of the ports in the last 8 months. Ask Glencore they are delisting their warehouses from LME, same as other big names, meanwhile Shanghai big money masters, that deserve even more respect as traders, took short positions step by step, with Chinese patience by months. Then they dumped it in recent weeks with erotic desdain, all together when the stocks in SHFE+bonded inventories achieved the magic number of 888 thousand tonnes, magic: they tripled their money on their copper shorts, and laugh in the face of people that say "there is not demand". have a pleasant evening all.
    20 Mar, 02:42 PM Reply Like
  • PM's Rock
    , contributor
    Comments (96) | Send Message
     
    Thank you. I think not.
    20 Mar, 04:13 PM Reply Like
  • arnot-1
    , contributor
    Comments (31) | Send Message
     
    I heard the Chinese have been using copper as collateral. When they need to sell the collateral (copper) to pay debts, this influx makes copper prices go down and then those that have to also sell make the price go down farther.
    This may indicate that China's property bubble is starting to deflate.... and that China is in big trouble.
    Just a suggestion... Time will tell.
    22 Mar, 08:19 AM Reply Like
  • PM's Rock
    , contributor
    Comments (96) | Send Message
     
    China and Russia are still well hedged against the dollar with their gold assets.

     

    If they, China/Russia, should decide to trade energy away from the dollar, and slowly liquidate their bonds, who is holding the cards then?

     

    We must consider what happens if the dollar is no longer the Worlds' Reserve Currency.

     

    It is coming, and you best prepare. Or just assume everything stays the same and your normalcy bias will depart you from your wealth.
    23 Mar, 09:24 AM Reply Like
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