Lake Shore Gold (LSG.TO)

Some analysts are having better impressions than they have had in the past. Just announced they are upping their guidance. There is potential for lower cash costs based on the premise that the grades look to be coming in better than expected. At these valuations, it is starting to look interesting.

He likes to look at a company’s capital market history. This one has continually raised money at dilutive share prices. There is no value created for a company when they do that. They got into trouble, so decided to sell more shares. He can’t stand those situations.

(Market Call Minute) Neutral, but with higher gold prices you would want to own this.

Used to own this. Have some pretty good properties in Ontario but they are high cost so he would rather be looking at the ones that have the big leverage on the production side and those that are already producing assets. This one still has to finish building and then accelerate production. Highly speculative money so if you want to take a gamble but there is so little risk in others, why bother.

(Market Call Minute.) High cost producer and with the price of gold coming down, this doesn’t look good.

(Market Call Minute.) Just announced they are going to look at their covenants with their debt lender. Have a lot of debt.

Wouldn’t recommend buying any gold producing company. They never make money. There is hardly ever any inside ownership on a gold company. They are constantly issuing paper. You can make money trading the paper if you get in and out quickly but over the long-term, you don’t make money on gold stocks.

Producing gold mines in Timmins. Likes it. Produces about 60,000 ounces per year. The problem is that they had always promised it would grow to 100,000-200,000 ounces a year but, with some of the operational challenges and the junior gold market malaise, the stock has been really pounded. Got a $35 million loan.

A great company at this price. An up and coming producer. Production is there and they are funded. Cost of production is covered and they have the money for the mine. Cash flow positive. As gold comes around these companies will be great assets to own.

All the charts on gold stocks have a variation on this. It doesn’t look like it has any reason to go anywhere else but down.

(Market Call Minute.) It continues to disappoint. In the Timmins area and currently producing about 100,000 ounces per year.

Has been Short this one for most of the last couple of years. He would stay away from this one. There are better places to be. Have missed on almost all of their resource targets.

Timmins area is ripe with gold. They are active in production. Have had some challenges, however they are still going to produce about 100,000 ounces in 2013. Recently received a gold loan from Sprott, which was a positive. Caught up in one of these risk/off Junior mining share selloffs. Excellent management. Could see it at $1.25.

Have a lot of production issues that are tough challenges in this environment. Bringing in a mine that is going to be expensive. If you own, consider selling for tax losses.

Likes these levels. Costs have been coming down. Have been guiding towards 85,000 ounces this year and looks like they will hit their target. Market will probably want to see 1 or 2 more quarters of execution before people jump in. Mining a grade that is slightly less than their reserve grade right now so there a lot of eyes watching the stock.