Barrick Mining (ABX.TO)

(Top Pick Jan 18/13, Down 41.57%) Its book value is about half what it was back then, so that tells you what happened. They probably did pretty well last year, considering.

Argonaut is the only gold he still owns. He is willing to hold on to a smaller one that has low cost. He would still avoid ABX here.

He is not the best person to talk about gold as he is not a gold bug by any stretch. Issues on this company are much more company specific. Bad hedges that went wrong, management got blamed and there was a rotating door and Peter Munk is now leaving. The underlying issue is really a fundamental macro one. The company’s future is tied to the price of gold and if gold is not going to go up, then the earnings are not going to go up. He personally feels we are seeing inflation, but because of the way it is calculated, it is not reported and not going through.

Chart shows the long-term trend is on the downside. It is currently trading below its 20 day moving average and is clearly underperforming the market. As yet, this is not an attractive Buy.

(Market call minute.) If you’ve got anything positive to say on gold and based on some of the chart patterns, he would be buying it in here. Gold could have a bounce. There is so much bad news built into the stock at this point and equity has been cleared up a little bit, there is a good chance it could bounce off these levels.

Expected to reveal new independent direction after December 4^th board meeting. They have to do something. Have been selling off assets and have been trying to do anything they can to try to turn the ship around. Doesn’t understand why people would want to buy these companies. You are better off buying the bullion.

Has been trending in a very narrow channel for the last 3-4 months. The longer the base, the better the case for upside. If they can get above $21-$22, then you have sort of clear sailing to the low $30 range.

A number of companies are trying to reduce their cash costs and are including CapX as well with some success. However, gold prices are not really cooperating. Gold stocks are cheap but have quite a bit of proving to do that a) they can sustain the lower costs that they are striving to do and b) that we have some stability in the gold price which hasn’t been there year to date.

Raising $3 billion in a share offering to cut down on their debt. Also, suspending Pascua-Lama. This is a huge deal involving 162 million shares. Basically they are doing an option to buy back their debt and fix their balance sheet, but this is really a horror story for shareholders. $18.35 is the offer price and it wasn’t so long ago that this was North of $40.

Has been very disappointed with this. It is not the company that he had originally invested in. Sees them scrambling to move forward. Selling some assets now but with the gold market taking quite a hit some of them are not as easy to sell. He is reluctant to let go of his holdings but he would if there was a significant pop of the price of $3-$5.

Cannot tell you what is the driving force going forward for gold. Does not know what will drive the fundamentals of gold.

Has never owned a gold stock in his career. Gold prices spiked over the last few years with quantitative easing. His view is that as quantitative easing begins to get unwound, he could easily see gold prices falling another $500 or so, back to $800. He is bearish on gold and the gold stocks going forward.

This company has a lot of issues. They have a lot of management, a lot of fat, a lot of debt, they have the copper asset. This is not a company that he would want to own. He would prefer the leaner ones.

Sold his holdings. Became very concerned about the apparent lack of control with the big Argentine/Chile project. There were environmental aspects that the company seemed to ignore.

Large capital commitments. ABX is a better trade than Kinross. Cleaning up their balance sheet is priority one for them.