Augusta Gold (G.TO)

Gold stocks continue to have issues with both stock performance and profitability. Bullion is outperforming the stocks. He also owns SPDR Gold Trust ETF (GLD-N) and with this, you don’t worry about strikes, labour costs, mine floods, etc. However, with a gold mine you are buying the potential of them finding more reserves.

Barrick (ABX-T) or Goldcorp (G-T)? Feels that Goldcorp is going to show tremendous production growth over the next 3-5 years. Barrick is struggling with a few problems including their copper project and some South American projects.

Price of gold, on a day-to-day basis, is subject to all sorts of manipulation. He is concerned about currencies. US just came in with a program that results in $85 billion a month of cash being pumped into the US economy. If the US$ is starting to look a little shaky, gold is a good place to put your money.

This is becoming the “go to” name in terms of the senior gold producers. Not as overvalued as it was. Thinks it will continue to get a premium because it is large, liquid and has growth potential.

(A Top Pick Dec 28/11. Down 14.72%.) Hopes gold stocks will come back at some stage this coming year. They are ridiculously cheap.

(Top Pick Dec 30/11, Down 15.07%) This is his gold name in the portfolio because of the cash flow it generates. 2012 was a huge year in terms of cap-x and goes down in 2013 and mines come on line. Expects they can significantly raise their dividend.

This is one of the top 10 gold companies globally. Between the 10 of them, there is a total market cap of $159 billion. Through them you are controlling 30% of global gold production. The thing with these companies is that there is not a full assessment of where gold prices are going. People are not making the connection but that connection will be made.

Broke above its 200 day moving average on September 12 and stayed there for a couple of months and then violated the 200 day. That is very important. Chart indicated a lot of sellers in 2011. When the stock ran up this year, it ran out of steam and the 200 is turning back down again.

(Top Pick Nov 18/11, Down 14.47 %) Still likes it.

Solid earnings. Starting to rebound. It lost its premium valuation. Premier senior. Have overcome recent issues. Slowly they are improving and the premium should start to re-enter the stock.

Stock was up today because of the election results and the fact that money will continue to be printed and the US$ long-term might be weak, meaning gold prices and other commodities will move up. This is the only gold company he owns.

Getting bigger but makes half the amount of money ABX gets but you are paying for the growth already. Prefers YRI-T

(A Top Pick Aug 15/12. Up 19.64%.) Covered Call Write. Buy Goldcorp at $36.47. Sell Goldcorp Jan’14 36 Calls at $6.60.

(A Top Pick Nov 7/11. Down 18.53%.) This is his only gold company and thinks they are the best managed with the best growth profile. Probably 50% production growth over the next 5 years. Stock is down because of a few glitches in the last 12 months at Red Lake and in Mexico. Red Lake earnings just came out and were better than expected. Mexico is going to take a little longer as they don’t have enough water to process the materials.

Most of his recent purchases have been into bullion funds but still owns this one. Good company. He is very bullish on gold and believes it will break through the $1800 level and move up closer to $1900. A good gold participation is necessary.