Augusta Gold (G.TO)

Very bullish on gold. Of the seniors, he feels this is the best. Thinks it is going to show fairly significant increases in production over the next several years and significant free cash flow. (See Top Picks.)

This is his cornerstone of the gold seniors. It is beautifully positioned for what comes next. Of all the seniors they are the ones that are just hitting it on all cylinders. Earnings that just came out for this quarter were stellar. The fact that the price pulled back, he would take as an awesome opportunity.

He is zero weighted in gold right now and has been for about 1.5-2 years. Thinks the cycle has turned against gold.

Thinks it’s worth $53.80, versus its current price of $34.20, a positive 55% upside. If it breaks through $34.90, he thinks it will go down to $20.60.

Every country on earth is trying to devalue their currency, however producers are having a big problem coming in on budget and meeting expectations. Price of gold continues to be sloppy, but in the meantime we are in a bull market and you should concentrate on what works and not on what you hope will work.

(Market Call Minute) Great growth profile.

Came down with the rest of the gold stocks. Feels the whole group is facing a credibility issue right now and are addressing this by looking at cost control and management. This one is a little ahead of the crowd improving profitability. Trading at the same price they were in 2006 and yet their EBITDA has grown 400%. Much cheaper than it was 5 years ago. Growth rate is about 70% over the next 3-5 years. Yield of 1.67%.

Gold companies have failed to deliver on costs and production. Even though gold price has been rising, their profits have not matched up. Noticed more rhetoric coming out of these companies lately that they are going to focus more on profitability and get away from the higher cost projects. Feels this one has the best profile, best production growth of the seniors right now. (See Top Picks.)

Sold his holdings fairly recently. Likes the company but it’s not quite as cheap as Barrick (ABX-T) but has a better growth profile. Would look to buy this one on weakness.

Trading at about 1.5X BV and, looking at the long-term for this company, it is cheap. This goes for the golds generally speaking. The issue is, when is gold bullion going to start moving again. (See Top Picks.)

(Top Pick Jan 5/12, Down 22.53%)

Some support coming in at around $33. Risk from a downside point of view is probably reasonably low. There may be some upside if, in fact, it can do an “oversold” bounce. May be just a trade rather than an investment at this point in time.

Prefers being in the mid-name in gold, where you can see some growth in production. People have access to gold in so many different ways that they really don’t have to buy a company. The cost structure has gone up a lot on these companies, which has really hurt them. From a technical point of view, gold can go lower. An ETF makes a lot more sense.

Mines in relatively safe political areas. Just ramping up Penasquito in Mexico which is going to be a very, very major mine. Hope to be mining over 5 million ounces in a couple of years. Have all the characteristics that you look for in a mine. Low-cost producer with a production profile going forward the next couple of years that has significant growth prospects. Could see $56 in the next few years.

There has been quite a differential between the GOLD ETF and the gold companies. There are mines shutting down and so on. G-T is a growth play and the ETF is a play about macro concerns. The outlook for the global economy is better as opposed to worse. Gold is going to be less in demand.