Premier Gold Mines (PG.TO)

Has a lot of respect for the president. Bought this in December, and just sold it a few weeks ago. The stock has come off since then. An interesting play, and something certainly worth holding in terms of gold. They are producing gold out of Arturo, and it looks like the grade is higher than expected. The Cove deposit they are drilling out seems to be hanging together now. He sees no fatal flaws here. He would like to see this under $2, and if he saw it at $1.50, he would buy a lot.

Gold has been all over the place. Seasonally, gold runs from July 12 until the end of September. Technically, the stock is coming back down to support range. You need to see gold bullion pick up from here. This is not a time period where he would be investing in gold. His preference is silver which tends to run well from January 1 into March 31.

This is a smaller company that used to be an exploration company. They bought some mining assets and are just coming into production right now. They are getting to the stage where the first cash flow is coming. A good little Buy if you believe gold is going to rally. Smart management. Their main operating mine is in Nevada, but they have great exploration assets in Northern Ontario.

(A Top Pick Jan 16/14. Up 27.92%.) Has just become a producer in Nevada. Nice cash flow generator. Short mine life of about 1.5 years, and might generate close to $100 million during that time. Also, thinks they will have about $100 million in cash by the end of the year. They bought Mercedes from Yamana (YRI-T), another 100,000 an ounce producer, probably generating about $100-$150 an ounce in profits.

Just acquired the Mercedes mine from Yamana Gold (YRI-T) for about $140 million, so they are now on the cusp of being a producer. South Arturo in Nevada will be producing any time now with a short mine life, so there are people questioning what happens after 2.5 years. Mercedes is also relatively short with about a 3.5 year reserve life. These are 2 projects the management team feels there is more to.

A bit difficult to value when looking at their assets. Started off as a developer in Red Lake, and everybody speculated that Goldcorp (G-T) would acquire them. That hasn’t happened. The geology just didn’t work out the way the company had expected. The company has now gone and done a bunch of other stuff, and now he is not sure what the company really is.

(Market Call Minute.) He likes this a lot. One of their main assets is in Canada, so there are good margins. There is a lot of growth here.

They are going to become a producer finally. It is a 2.5 year mine life. They will build a nice cash base. They have a JV lined up after that.

Doesn’t see particular growth in their deposits in the near term. Any hope that you would get would come in the form of a better gold price. They have access to cash, so it is a solid holding.

He is constructive toward gold and he likes the people here. Gold is locked in a war with the US dollar.

Have gone from being more of an explorer, based in the Red Lake camps in Ontario, and branched out to Nevada. This is a transition from an explorer to a developer, and that tends to be a portion of the mining lifecycle that he doesn’t like from a risk standpoint. There will probably be negative free cash flow for a number of years.

(Market Call Minute.) Great company. Just did a $300 million joint venture with Centerra (CG-T) and are going to go into production with about 75,000 ounces a year in Nevada.

Good management which has created a very unique package of assets. Their big focus right now is Hard Rock in Ontario. Have a great team of people. There will be a lot of analysts’ reports coming out in the next month or two.

$4-$5 by the end of the year? Depends on where gold prices go. This is one of the better exploration companies because of good exposure to Red Lake in a joint venture with Goldcorp (G-T) as well as exposure in Nevada. Good company and good management team. Does not think gold will trade out of the range of $1200-$1400 and thinks the stock is pretty well range bound.

Has a very nice asset in Red Lake. Now that Goldcorp (G-T) is giving up on Osisko (OSK-T) this could be a takeover candidate. However, he is quite negative on the gold space generally. He is short a number of gold producers. Wait for the summer when you should get a better price.