Kinross Gold (K-T)

Barrick Gold? He prefers Kirkland Lake and Agnico Eagle among the big producers, because they have better leverage and are streamlined. He always puts Barrick and Kinross in the same category. Kinross buys assets at low prices, but he'd rather buy the companies they buy than Kinross itself. (The one positive with Barrick is Warren Buffet coming on board; big-value investors will buy Barrick and won't bother researching the mid-tiered players.) That said, he expects a better-levered move from KL and AE.

Bullish on gold. This one will give you exposure to the miners. He's always looked for the best operators, like KL with its clean balance sheet. Watch the USD. If it continues to rally, you'll get a much better opportunity to buy.

The earnings were good. He just doesn't like these big companies. He has done better with the other producers. He would go with Agnico that presents a better value. (Analysts’ price target is $9.25)

Not fond of the big boys like this and prefers buying them early to ride the wave when they grow. It's like buying Microsoft in 1995. Companies like Kinross are only now getting into the money, because of their production costs in so many projects. He avoids companies like this.

It is on his stock watch list. They are having difficulties in Africa. It is one of the favourite gold companies he does not own.

This came under new management 6 years ago, the new manager has been hitting his targets pretty well. The main mine back then was in Russia and Gallender was concerned about the political risk. Their sustaining cost is low. Then the company paid way too much for another mine. It is now producing and he has started watching it again. It has a debt load of about 1.5 times revenue, which is not terrible for a mining company but is a concern.

It’s been coming down but he is not ready to buy yet. They have a high debt load but not much of it payable until 2021. It has a lot of upside. They do a lot of business in Russia. So far they have dodged the bullet on sanctions but there is risk.

Years ago, they bought the Tasiest mine and paid a horrendous amount of money for it, and then had to write it all off. Now that everything is written off, you have a hard asset. They are now going to enlarge the mine in 2018, and it is going to be a low-cost producer. If we get any kind of a move in bullion at all, the stock should do very, very well. (Analysts’ price target is $6.99.)

He never takes gold stock questions and does not own them. In 1980 gold was at $800 and the Dow was at 800 points. The Dow crossed $24k today while gold is hoping to get past $1300. He does not see the justification. He has ever owned any gold stocks.

This has to get over some reputational damage that was done with acquisitions in the last bull market. His suspicion is that it will be a good beneficiary of a reasonably good gold market which he sees unfolding in 2018. He is favourably disposed to this company.