James WestOsisko MiningOSK.TOSTRONG BUYMay 16, 2012

He's a dip-buyer of gold and a royalty name like has more correlation on the gold price than a miner like Barrick.

It's been bumpy. It broke resistance at $19, but suddenly retraced, because of weakness in their diamond operation and poor diamond prices. Also, there was a corporate shake-out, including cutting a founder and installing a new CEO. Since then, they've returned to $19 and he expects shares to re-test last year's highs.

Thinks gold got sold out as a sector and had a good bounce over the few months. He looks at it as a not a long term shift. He would not focus on this group. Don’t add gold holdings but lighten them up.

(A Top Pick May 14/13. Up 79.18%.) What happened here is the takeover action. First the overture made by GoldCorp (G-T) followed by Yamana (YRI-T) coming in like a white knight, and ultimately Agnico (AEM-T) and Osisko (OSK-T), which seem to be in the driver seat. He thinks the bid is a full and fair value for what the business is worth.

Goldcorp (G-T) deal is underwater right now. The proposal they have on the table is lower than where the stock is trading. Yamana (YRI-T) came in last week with a friendly proposal to buy half the company. Thinks this saga has not come to a conclusion just yet and feels Goldcorp will likely come back and rebid.

Stock is trading well above Goldcorp’s (G-T) offer price of just under $6. Gold stocks currently have positive momentum so you have a combination of momentum in the sector and a company which is being taken over. Chart shows it has clearly broken out and is in an upward trend. Outperforming the market and above its 20 day moving average. Looks great.

When the commodity price turns around then you wait for acquisitions to start. He was not surprised it went. Fits tightly into G-T’s stable of mines.

G-T and OSK today agreed to settle some of the litigation between them, but they are not currently in talks. Gold had a huge move and it is hard to distinguish what is the driver. This one should suffer if the deal is not going to go through. Gold stocks are very, very cheap. We need core inflation to pick up to drive gold. We are looking at range trading for most gold stocks right now. Thinks there may be one more move down for gold.

G-T’s bid was rejected by OSK. The cost of production for OSK is higher than he likes to see. A great, well managed company with assets in North America. When gold prices get to where he thinks it should be all of these companies will do well.

(Top Pick May 14’13, Up 57%) They are in play now. The premium is pretty low here. A unique asset. It is a question of who will pay what.

Goldcorp (G-T) is asking shareholders to render their shares for a little over $6 and some shares. What do you suggest? Doesn’t know the details of the proposed merger, but there is nothing wrong with taking some of your profit. Given that these deals are never a slam-dunk, no one ever went broke taking profits.

GoldCorp’s (G-T) offer to take them over was rejected. However, this was definitely setting of value for the sector, especially for some of these companies that have been ridiculously beat up. They might come back and make another offer.

He owns G-T. A lot of bigger companies will have to acquire producing companies to grow. Anything of value will be cheap here relative to 10 years from now. It is now trading above a recent resistance. They may have to raise their price target. Technically it trades well. If it trades below $5.95 then get out. Ride it for now.

(Market Call Minute.) Has come through their ramp-up stage, they are executing, getting their production on and bring down their cash costs. Last quarter had record production.