Kinross Gold (K.TO)

A well-known story that has been around a long time. Made a number of acquisitions over the last 5-6 years, that haven’t necessarily worked out. The one thing in its favour is its exposure to gold. In an interest rate environment, where negative rates are prevalent around the world, people are going to question loaning or leaving money in a bank and getting a negative rate of return. He likes this company.

Ranks fairly well from a fundamental and a technical basis. With the price of gold moving up so much and with a lot of these gold stocks, there is potential for negative surprises, because there is so much expectation built in. It wouldn’t surprise him to see the company miss on this quarter and the stock pull back, which might be an opportunity to get in.

A large gold producer with production at about 2.5 million ounces and all-in costs at about $1100 an ounce. They are in Russia, so there are political risks. About a 3^rd of production is coming up in Brazil. There is also a mix of Nevada, Alaska and West Africa. Recently bought some assets from Barrick (ABX-T) which looks like it will be a really good acquisition. The problem, even though they have these new assets, is that production is rolling off from 2.5 million ounces to 1.7 million ounces over the next 3-4 years. He expects cash flow to decline by about 15%. To offset that, he expects they will make more acquisitions, and in this market it is going to be hard to deploy capital and make it accretive. There is better value in other places.

Made a very large acquisition of Taslast in Mauritania a number of years ago, which wasn’t a gold producer, and which changed the shape of this company. They have a few projects which are coming on. He would prefer others.

He likes this company, but one thing that has bothered him a little in this marvellous boom in gold and gold stocks is that most gold companies are trading at the top of the Bollinger band, which is not a great time to buy historically. However, this one is only halfway up. From a technical point of view, this is still a bit cheap so you could buy it.

Everything they have touched in the last few years has gone to lead instead of gold. There is more leverage in other gold stocks. He prefers G-T.

His company has this as a sector perform with a $2.50 US target. He is not that keen on the company. Management has not really executed as well as he would like.

Has benefited tremendously from the run-up in gold. Technically, the chart is very positive because it has broken above the resistance of 2015. He is looking at an upside to about $5. You have to watch this, because gold, from a seasonal perspective, tends to weaken very shortly.

Gold had a strong rally in the last while. These are worrying signs if you are an optimist like him, and you want things to improve. It is not good with people are piling into gold, because that means stuff is not working elsewhere.

This is a gold company that he likes long-term. They have done a lot of good things. Got into trouble with their Russian property. If you look at all the statistics comparing it with Agnico-Eagle (AEM-T), it is quite cheap.

This has had a huge move in the last little while. Had a break above a base building pattern. Technically you have to like this stock. On a seasonal basis, this does very well right through until around the end of February, or approximately when the annual prospectors’ convention is held in Toronto, March 6-March 9. During their convention, that is a great time to take some very good profits.

Has been a bit of a disaster. Costs have gone up so much and finding higher grade projects is tougher and tougher.

One of the few seniors generating free cash flow at the moment. That is a little bit misleading because most of their assets are declining in free cash flow going forward. We are going to see declining grades in 2017-2018,. Right now this looks like the best it can get. A bit of a value trap.

This is a tough one and he hasn’t owned it for years. They have had issues with production and ill-timed acquisitions. Not the lowest cost producer. It is cheap, but there is a reason for that. There is still the Russian risk that won’t disappear, and is an overhang. He prefers to stay out of this one. There are other places to go.

Totally dependent on the gold price. We are seeing some of the leading stocks breaking out of base formations, so this is a good sign. In the last week or so we are seeing this. He has G-T and SLW-T