beabaggage

Risky Opportunity Awaits in Junior Gold Sector

long NXG and GFI a downtrodden major getting its act together now.
Love how gold fell 25% and the world said gold's rise is over! that is a blip on a gold chart. here we go up again.
if you want to see a real chart, look at the inflation adjusted gold chart in the new Natl Geographic that adjusts gold back to 1700 in 2008 $, that makes early 80's spike price $2k and we are only in the 850 range, so a true spike would be 2-3k. very interesting that gold was inflation adj 1k for most of the 1700's. imagine the inflation in the 1700s with all the gold coming from new sources in the world then. you just have to own some gold and down trodden juniors and select majors are the way to go.

UBS Lowers Gold Expectations Again

People should do their own ground up fundamental reviews of companies and trends before buying any stock for more than a trade. Check out the industry sites. Read Capex detail in annual reports, cost trends, quarterly reports on company investment going forward, look at debt/who holds it/type of debt. LIBOR down will help some cos a lot. Big drop in demand for mining equip will drive discounts for cos that need new loaders/trucks. Oil down will ease site costs. Labor scared of layoffs will reduce high labor costs.
Gold down 30% from peak is not as bad as say PRU down from 110 to 30! so dramatic cost decreases coupled with a floor price in the 700-1000 range, co's. putting on hedges again to protect cash flow and lots of uncertainty will allow industry to recover.

For that 5-10% you should hold for protection in your investments, now is a good entry point.
Suggest CEF which I am looking at, NXG which I own as a cheap option on the whole industry, GFI as a beaten down major with access to cash to acquire/new management in place.
big drop in CN $ will make the CN cos look cheaper to the world looking for cheap assets.

Base Metals Now Dragging Down Gold and Silver Companies

NXG is a gold company, not a copper company. They have hedges on the copper remaining in their Kemess South mine to a degree. They may? have hedged more? who knows, see what earnings report says on 11/4 from mgmt. Once the KS mine is done, co. is a pure gold play. Should Kemess North ever come back from the Indian Graveyard! copper may be a factor again, there is a vast copper resource in KN. GOLD folks has held up at $850, down less than 15% compared to other commodities. With this management's savy, NXG is a very cheap option on gold in my opinion with upside to 3-5$, not $1.50 CN. At 96 cents, I am very long and adding all the time with my Canroy Dividends every month. Once things settle out, GFI, Barrick or someone will snatch them up for sure.

Copper Prices Slumping; Targets Cut for Barrick Gold and Goldcorp

As long as copper's primary production comes from politically/labor unstable production centers, companies with copper production in producing stable mines will be valuable. It is just a matter of time before FCX or Xstrada buys something like NXG, selling for $1.14 a share now with vast qualtities of proven reserves. Just to sit on it until prices rise. We may also be surprised this quarter to see some hedges place on some of these "unhedged" production companies locking in good prices on some production.
Long NXG, just bot more.

High Number of Gold and Silver Mergers Forecasted

Good points, own NXG, CDE. Same could also be said/apply to PAL, SWC that I also own re plat/palladium group metals. Large cap prec metal cos could easily swallow these companies to diversify further into mostly "safe" country places like CN/AUS/USA/MEX.

Challenges in Gold Mining

Good analysis. Instead of the unknown return on investment from a new development ( is there going to be skilled labor? cost of steel/fuel to develop/work the mine? power available? environmental crap? etc etc.) these majors will just buy the minors. Same in silver, platinum (happening already) palladium, copper etc.
So buy the juniors down a lot this yr in safe countries with good cash flow, little debt, good management and developed assets and infrastructure.

I am long NXG, PAL,CDE,SWC adding to them as I can.