Opinions
Jason Mayer
Augusta Gold
G-T
WATCH
Jun 27, 2013
$23.850
Stock price when the opinion was issued
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COMMENT
If Barrick buys Newmont and Goldcorp walks away with $630 million because the Newmont-Goldcorp deal (of last month) doesn't actually go through. Can GT shareholders kick the GT board out--the board who gets a hefty package, but not the shareholders? He can't comment on this though many are asking this question. About this deal, we haven't seen gold M&A deals for a while. From Barrick's point of view, this is an obvious plus. Many are surprised that this is the deal.
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BUY
Big relationship to US dollar, so dollar strength means gold weakness. Gold gets seasonally weak right now. May go sideways for a while. If it breaks the downtrend, it can accelerate pretty quickly. Second seasonality is in the summer, but could happen earlier. Timely to buy right now, and wait for the next shot up.
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DON'T BUY
He's never really owned Goldcorp, Newmont and Barrick. The share appreciation would come better from an Agnico Eagle or Kirkland Lake which have growing reserves, great management and low production costs. He stays away from companies like Goldcorp or Barrick or Newmont. In fact, Aginco has outperformed Goldcorp and will be self-sufficient by 2023. It pays a good dividend and they continue to grow overall.
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PAST TOP PICK
(A Top Pick Aug 20/18, Up 2%) This merged with another company and was taken out. He still likes the gold space. Central Banks are beginning to run on fumes and have no idea what problems they are causing for investors down the road. Gold is good in deflationary times and even better in inflationary times -- it doesn't do well in between.
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He never calls a bottom. It is just a case of doing what the gold price has been doing. They could be shutting down mines and cutting production, but they are a lower cost producer. So this is a fine call in terms of gold, but at this time he would not want to make a call that we are at the bottom. If gold stays down they could shorten the life of mines by not going as deep and therefore cutting costs further.