Augusta Gold (G.TO)

One of the best big gold producers. There have been some nice trading opportunities recently in gold. There is probably going to be some M & A in the space so they can build up their reserves. They may be able to bulk up their reserves on the cheap. He does not know where gold is going.

Longer term it trends with inflation, which is low. He has a small position.

He is not a gold bug, but likes it now. He thinks it put in a bottom. It has held it since August. This is a very popular gold, although not one of the stronger ones. It will probably rally with the group. FNV-T might be a stronger stock or AEM-T.

He has FNV-T instead. The commodity ran up so much, but so did their cost structure.

Highs and lows are getting lower, so it is in a downtrend. You need a break of the trend line before buying.

Stocks in developed economies are likely to see multiple increases as money finds its way back into them. The long term picture for commodities is as an underperformer to equities. It is likely to be a 10 year period of underperformance.

Just made a discovery in Ontario but there is a high risk of water leakage because it is under a lake. It is your best larger cap gold company but he is a gold bear. He is short two gold companies.

The only issue is that they have missed the last few quarters. Have gone through a crucial buildout phase where a couple of mines are ramping up, which is significant for their growth profile. It should go from about 2.9 million ounces to about 3.4 million in the next 18 months. This is a big growth producer.

Gold may be forming a bottom here, at least short term. The US$ has had a huge run over the last year and is due for a breather. If that is true, then gold can rally. Goldcorp is one of the top quality companies. He has been looking at gold companies through a filter of the balance sheet and what happens if gold went down to $1000. From that point of view, this company is in a very good position. This would be his #1 choice.

For the last 2-3 years he has not been in gold. Ever since the fiscal cliff in 2011, when gold made its peak and people were most worried about the US$, the US$ has been on a rally ever since. Gold is inversely related to the US$. At some point, if you see the US$ strength level out and stop going up, you are going to see gold start to rebound. Any time he looks at a group that has been in a bear market for a while, he looks at the balance sheet, not just the income statement. Even though this one is not the biggest in the space, it is by far the best disciplined with one of the best balance sheets.

With resources you have to have a view on what it will do over the coming years. He owns next to no gold because he does not have a positive outlook for the next couple of years. Gold does not get consumed (most of it doesn’t), but rather gets stored as blocks. Look at what it has done over the last couple of years. He thinks gold will drop further until the trend gets broken. G-T is one of the best of the large cap producers. You should go with large cap gold producers if you must have one for diversification.

Currently it is difficult to envision gold reaching their old price levels. Within this space there are 2 companies that are of interest to him, and this company is one of them. His current position on gold is that it is in secular decline.

He hasn’t touched gold in any way since 2012. As the world becomes more confident especially because of what is going on in the US, there is less and less reason to own gold. There are easier ways to make money in the market. As interest rates go up in the US it will increase the opportunity cost of owning gold.

Has sold all of his golds. Of the seniors, this would be his favourite. It has pretty good growth as well as some silver. He doesn’t like the macro outlook for gold. If the Fed raises rates, that will be a huge negative for gold.

Has a bit of a bias against gold stocks in general, as they tend not to be great fundamental value investments, and tend not to cash flow. This scores poorly on a lot of metrics and has a fair bit of debt.