Yamana Gold Inc. (YRI.TO)

They tried to do a Rights Offering to spin out Brio Gold, and only about 25% were taken up. It has left the company with a bit of a debt situation. Going into 2018, they are going to have to raise some money somehow, to pay down some debt. There are other options where you don’t have this overhang.

Wouldn’t be his top pick, as he sees them having less cash flow generation, and more political risk with some of the jurisdictions they are in. They have a lot of mines on the go right now and having a hard time managing the growth operationally. He is getting a little more bullish on golds. (See Top Picks.)

If you want to recognize the tax loss, tomorrow is the last day. This is not his favourite name in the gold space. However, he thinks it is oversold and getting to a valuation level that is somewhat attractive. They have constantly missed on the cost side of their production. He tends to like gold companies that are growing their ounce base, and this one is no longer in that position. He is short on this. If he held this, he would switch to Mag Silver (MAG-T).

He doesn’t see a long-term secular story on gold and would just use this as a trade.

Seasonally, you want to be in gold miners from about the end of July through to October. They can have a bit of a bump up in January and February. The chart shows lower highs and lower lows, and is constantly resisting at the 20-day moving average. The 20-day moving average comes in at about $4.41.

There are 3 reasons to own gold. 1.) You think there is a disaster coming. 2.) You think there is big inflation. 3.) You think the US$ is going down a bunch. The US$ is rallying, and there is no disaster in the near term. Money is leaving the sector.

Based on global inflation expectations, he thinks we have seen a bottom in gold, and it is going to work its way higher over time. However, the shorter-term picture is really dictated by interest rates. If the Fed makes an interest rate hike in December and it seems like things are on hold for a while, gold will probably stabilize and start working its way back up based on inflation. He has taken his gold position down, but is now starting to look at it again.

This is having a problem, and could be forming what is called a death cross, when the 50 day moving average falls below the 200 day moving average. The chart shows an almost perfect “head and shoulders pattern”. When you have this pattern, you take the height from the previous range, and the downside risk is to that same range. Not a good situation to be in.

(Market Call Minute) It has struggled recently with projects not meeting expectations. They tried to sell off assets. It is a ‘re-building’ story. This will do well in a great gold market.

He is bullish on gold, but fully expects a pullback in the next little while. This one is similar to a lot of producers and similar to the pattern on bullion. Broke the downtrend earlier this year, began to move up, and has now pulled back to possibly a short-term trend line. As long as you don’t see massive deterioration, it would still be healthy from a technical perspective.

(Market Call Minute.) Not his favourite gold company at the moment. He would rather own a couple of others instead.

With the liquidity present in this company and with the run it has enjoyed, he would employ very tight trailing stops.

This has done quite well. One of those classic stories in that it just overcorrected, some of it justified by past weak performance. They have gotten back to their knitting in terms of reducing costs and creating free cash flow. Just sold one of their Mexican mines.

Ranks very well in his process, both from a fundamental and from a technical standpoint. As to whether there is more room left to go, a large part depends on gold and where the price goes. Thinks we are probably entering a new bull market for gold, but it is hard to stay with because the rallies in the declines can be so sharp. In a case like this, you really have to trade around it. Have a core position, and then add or remove as the stock runs up.

Seasonally you are probably heading into better times for gold, but wouldn’t put too much into that seeing the run that gold has had. This has almost tripled off the lows and you have to worry a little about the political risks in the South American jurisdictions. There is a mishmash of projects, and there’s not much operating cash flow. He would take your money and run.