Yamana Gold Inc. (YRI.TO)

This is probably the doggie stock of the medium to large size gold companies. Normally this is the time of the year when gold stocks start to show a bit of performance. Long-term trend on this one is not good. However, the chart shows that in the last few weeks it has been forming a nice little base. He would guess that it has already moved above its 20 day moving average, and is outperforming the TSE composite.

Acquired Osisko (along with Agnico Eagle (AEM-T)), which she likes. Also, likes what the arbitrage traders did to the stock. Also, had a disappointment in a couple of their smaller mines which she is not too worried about. The 2^nd half of the year is basically the time, seasonally for gold. Once a commodity has stabilized, which this has done since last summer, you get a lot of M&A in the space and you get the stock really moving without having the commodity having to move much.

Debt is rising. Balance sheet is a bit stretched. You need an increase in the price of gold.

A mid tier intermediate gold producer. Cash costs are good at about $6.50 an ounce. All-in costs are at about $9.50. These are below average of some of the senior producers. Asset base is largely in South America. 2 main assets El Penon and Chapada are located in Brazil and Chile. Had a disastrous 1^st quarter with production missing expectations by about 10%. Also, didn’t give a whole lot of comfort that things were going to get better in the interim. Perhaps they will be able to make some of it up in the back half of the year. Also, in the 1^st quarter, they made a joint venture bid with Agnico Eagle (AEM-T) for Osisko (OSK-T), which weighed on the share price as short-sellers shorted this company and bought Osisko. That pressure might be temporary. Thinks the weakness has been a bit overdone and he values this as somewhere around $6.

Virtually all the gold stocks are sinking. It looked like gold was going to break out for a while, sort of held its ground, but has now broken down. He has recently sold some of the stock. Doesn’t think the stocks will move until there is some inflation on the horizon, which doesn’t seem to be in the cards. Gold hardly twitched with the Ukraine situation.

Hurt by operations issues and the Osisko bid. He is not a huge fan of gold anyway, so would not get into the name. He does think they will come out okay.

A gold producer and generally speaking is a pretty good operator. Gold prices were at around $1900, but have dropped to about $1300 and gold stocks will reflect, in a large part, movement in gold prices. This company does not hedge its production so if gold prices go down they are going to get less money. She does not see this going back to its prior highs in the near-term.

Feels the Osisko (OSK-T) transactions might be causing a bit of a headwind on the stock. If you own, wait for this deal to settle as there should be a rally at some point and lighten into the rally. Be patient and let the gold market rally this summer perhaps and position your personal position the way it makes sense in your portfolio.

(Top Pick Mar 28/13, Down 38.16%) The OSK-T deal is good. Slightly accretive. What is unique is the tax pool of about $600 million.

Has a small position. Right now he is focusing more on some of the mid-cap names. Brazilian riel is having a positive impact, but he is a little concerned with companies that have a large base metal by-product credit, just because of some of the things that are going on in China right now. There have been some issues of copper inventories being held for collateral. Copper inventories in Shanghai are starting to get quite high. Not terribly excited about this company.

(Top Pick Mar 5/13, Down 18.39%) High quality company and cash flows were growing. He sold it in the last year to replace with Franco who have a different business model and could take the stress YRI was facing. Argentina got worse and that was another factor in exiting YRI (25% Argentina).

Problem is that the growth rate is probably not sustainable going forward. Started as a show me story and they did well so far but now gold is sliding and not sure why you want to hold ANY gold company. Prefers G-T.

Going with what is happening in other gold stocks. Has been a dog for a long time and significantly underperformed the market. Recently broke through a very long downward trend and is now establishing a bottom. Chart shows it has just completed a reverse head and shoulders pattern, the best typical pattern you could possibly have. Trending higher, above its 20 day moving average and outperforming the market.

(A Top Pick Nov 2/12. Down 42.87%.) He did not own this stock at the time. From a technical perspective, gold stocks look like they are attempting to bottom.

(Top Pick Mar 5/13, Down 24.38%) It had already come down a lot. He added to it. Was not the greatest thing. It is still one of the better intermediate producers. It should benefit from the declining US dollar, but there is political risk in Argentina.