Kinross Gold (K.TO)

Not his favourite in the golds. Too many assets in Russia. They are writing off assets.

You have about 5 majorish type gold companies, and this is one of them. Its future is hinged quite heavily on success of its mine in Mauritania. Getting it running properly will be a great aid to them. This will go up with the golds as the golds go up. He prefers Pretium Resources (PVG-T), which has an immensely rich grade interspersed with low grade.

Has been probably the weakest of all the gold stocks in Canada. It is in a downward trend and has been trying to bottom in the last little while, which is probably setting up for a typical period of seasonal strength. This is probably not the best gold stock to buy, because there are others that are starting to show opportunities. Technically, it is in a downward trend, but like most producers in Canada, it has been forming a nice little base pattern over the last 6 weeks or so. You can buy this on weakness as a seasonal trade coming into March of this year.

Gold stocks have been beaten up again. As a company, this is a good company. The gold seasonality takes place in the summer months, but they really got beaten up in December and that represented bargain-hunting when things get sold off for tax losses. Even though it is not a seasonal period for gold in January, he can see this happening again because they have been so badly beaten up. There may be a little bit of an uptick towards the end of the year. This is not a seasonal trade that he would do, because gold does not beat the market on average.

A lot of gold stocks are struggling because the price of gold has come down to about $1200. There are still concerns as to whether or not the company is going to end up making money. Recently reported their estimates and earnings have been shaved by 33% in the last 90 days. Earnings are expected to grow by a modest 5% in 2015.

Great company if the sector is going to double. But they are not doing well now and have a lot of debt. Part of their asset base is in Russia. Prefers others.

He has always suggested that people switch out of this and go into something else. All of these big companies are fat and need some cutting. Any new up-tick in production won’t add much to the bottom line. All the smaller guys are going to have the leverage.

A big portion of their assets are in Russia. Because of what is going on, he doesn’t have any inclination to go down this path. Embargoes going back and forth between countries, could impact this company.

Very cheap and is forming a nice bottom. The bad news is that until we get better bullion pricing, the stocks really can’t take off. If we do get better bullion pricing, these stocks will take off like a rocket.

Has under performed on a relative basis, to its peers, mainly because of its Russian exposure. People are afraid of the geopolitical risks. Thinks it is an interesting Buy because of his constructive view on gold. You can trade in and out of this quite quickly if you are wrong.

(A Top Pick March 25/13. Down 45.02%.) Bailed out of this pretty quickly. The whole gold sector was just a mess. Took his tax losses and moved on.

(A Top Pick March 25/13. Down 48.76%.) Bought this thinking the gold market had pretty well bottomed out. Treated this as a trade, but it didn’t work out. He was out at around $6.

Thinks this will be Up by the end of the year. Q1 started as a very strong quarter with costs below guidance, and production up across all fronts. This is expected to continue. In the 2^nd half of the year Tasiast, one of their main mines, is supposed to have the grade come up. A strange asset base with assets in Russia, South America, Alaska and West Africa. Free cash flow looks to be quite strong, probably around 10%. Two stumbling blocks would be Russia where a lot of the free cash flow comes from, and Tasiast, the large West Africa development. Put out a new feasibility study on Tasiast, and is looking to building that asset. If so, the free cash flow will disappear for years to come. There are better places to put your capital.

A couple of years ago they bought a mine which was quite controversial. Lately things have been improving in that mine. Feasibility studies of building it out further have been getting better. The last feasibility study showed that it is possible to earn a 17% rate of return going forward. This is based on a lot of assumptions of course. Their latest quarter showed better operating costs with higher grades in some of the mines. Have some exposure to Russia which he feels has influenced investors and has held it back quite a bit.

Great company in a good business. Growing quickly. Stick with it.