Barrick Mining (ABX.TO)

(A Top Pick June 13/12. Down 45.22%.) A stock has to do what it is supposed to do. This one didn’t. He owned it for about 5 minutes. Company has too much debt.

(Top Pick Aug 30/12, Down 44.34%) When you find something isn’t working, then get out (10% down). He also sets alerts at 3% up or down in any given month. It is discussed within his company at this point.

ETFs had increased demand for gold stocks but are now selling off. Would like to see markets settle down. He would like to see some mines shut down. He sold out at a profit.

Cost of capital was greater than the spot price of gold so they had to lay off 30% of their executive crew. In this industry, it is very difficult to put your thumb on what cash costs will be this year, next year and moving forward. Too many moving parts. Some of the acquisitions they made are not panning out and they will have to start to moth ball them. Short-term, this stock is going to be sitting there and the street is going to say “show me”.

Have about $16 billion in recourse liabilities. The problem at their Pascua-Lama project is very real and they are going to have to work very hard to address it. They are going to have to restate their reserves and resources in the face of a $1250 gold price when they are carrying them on their books at a higher price. Generates a lot of cash because they have a lot of equity in their business.

Has a pretty debt-heavy balance sheet. Doesn’t think they have any debt due for several years, which is a good thing. Doing what they need to do in a down market. Selling off assets, cutting back CapX and just going into survivor mode. This will impact the growth going forward.

It is getting ready to test the resistance level. We had a little head and shoulders pattern recently. Established an upwards trend. You have all the requirements for a seasonal trade until the end of October. Target would be the current 200 day moving average.

(Top Pick Jul 10/12, Down 49%) Longer lead time has hurt them. People are saying, are you still cash flow positive. What about the marginal production? What will be shut down? The perceived net asset value has been hurt. It is washed out here and is more speculative than investment. Prefers G-T

Economy is improving and he doesn’t want to be in gold. There may be a time when he will look at gold again but at this time he has no interest.

He had thought all the dirty laundry was out years ago but there is always something that rears its ugly head. He would steer clear from this name. Dividend is safe, but they have a staggering debt level and some major CapX programs on the go.

Just announced they are going to get a $4.5 billion-$5.5 billion charge in the 2^nd quarter on building their Pascua-Lama project. This company has had a fascinating history. Made some major mistakes over the years. Bought at the high point in the market. Some of their priorities have been very, very confused and not in the best interests of shareholders. Wouldn’t surprise him if it got absolutely hammered next week.

Have had a rough time, capital cost blowouts and 13+ billion dollars in debt. As gold corrects, the equity will erode at an increasing rate. Costs are about same as G-T but then there is the debt to service on top of that.

30 year lows. Same as YRI. Cutting head office staff. Trimming expenses. Good for the industry. They will be more efficiency going forward.

4.2% dividend is higher because share price is so weak. A way to participate in the gold sector. They have suffered from geopolitical issues, rising labour and energy costs and permitting issues. They have taken on a lot of debt to make acquisitions. If gold moves up it would be good but there is uncertainty about that.

(A Top Pick June 10/12. Down 48.16%.) Today, this is a compelling story. You are now buying it at 7X earnings and under BV. Very rare you get this kind of opportunity in a gold stock. (See Top Picks)