Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Charles Oliver, HBSc CFA commented about whether RIO-T, GUY-T, PRB-X, SBB-T, SSRM-T, P-T, AR-T, PVG-T, RMX-T, AUQ-T, PG-T, DGC-T, MNM-X, YRI-T, THO-T, PAAS-T, AGI-T, TME-X, MND-T, LSG-T, IMG-T, ROXG-T, AKG-T, BTO-T, KL-T, TXG-T, ELD-T are stocks to buy or sell.
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Over the last 10-15 years has been one of the best performing gold stocks in terms of building mines, low cost of production and making profits. In the last couple of years all these stocks went down. Off about 70% from its highs. Still growing their production and are at about 720,000 ounces right now. Ultimately they will be doubling that.
Ontario is a safe jurisdiction. Has been some time increasing the shaft which can hoist about 3000 tons, up from about 1200 tons. They have a new management team in place. Hasn’t done it yet, but feels they are going to get close to that tipping point where this thing can make an awful lot of money. Very high-grade north of .4 ounces a ton.
Big believer in the story. Have a ton of cash. Recently acquired PMI Gold Corp, which has a property about 10 km away from their Asankrangwa project in Ghana. One of the nice things is that they are capitalized so they will be able to build their project. The asset they bought close by is in such close proximity that they could actually process the ore from that deposit at the same plant. This gives some economies of scale of putting 2 companies together. A couple of years ago, the management team bought into the company with about $20 million of their own personal money. Cheap.
Russia’s invasion of the Ukraine. How will this affect gold? There are 2 sorts of situations. In times of crisis, gold typically does well because, when people are not sure about outcomes, they feel gold will protect them. However, when people feel fear of situations, they sell everything and put it into the US$, which is ironic because the 2008 banking crisis which was falling apart with too much debt and yet the US$ rallied. Thinks you have to see how it plays out. There will be certain periods where the US$ will go up and expects there will be certain periods where gold will go up.
Political risks? As a portfolio manager, he has to diversify his risks. Tries not to put too much risk in any one country. Looking at Burkina Faso, there is some risk, but doesn’t think it is high level, but you have to be cognizant of it. There are some elections coming. Current Prime Minister, who has been in place since 1986, will be losing his chance to run again unless they change the rules. This company has a very high grade project and is trading very cheaply. If he has 3%-4% holding in this country, he is fine with that.
Just got downgraded by Moody’s. Have a pretty strong balance sheet, but has been deteriorating with lower gold prices and high cash costs that they have been running with. He has increased his holdings at times where there have been weaknesses. In a higher gold price environment, this company will actually start to make money and there will be a big re-rating on the stock. If you don’t believe gold prices are going up, you don’t need to be here.
Bought and sold this a number of times in the last 4-5 years and is currently out of it, but kicking himself somewhat. Feels he should’ve started seeing some of the signs of a turnaround. Really pulled up their socks in the last 6-9 months. Had some issues and ramped up their mines. Had a great last couple of quarters. Guidance seems to be going up. Very interested in revisiting this, but he’ll wait for a pullback.
Key thing about this company is management. Good management. Pays a nice dividend. Have 2 assets, one in Australia and one in South America. As a portfolio manager, he likes big, world class assets because it is very tough to make money with small assets. These guys are good operators and have done a great job with what he would consider 2 “okay” assets.
Has continued supporting them through financings over the last several years because he feels there is a huge amount of value in their assets. Have assets in Timmins right next to Goldcorp’s (G-T) mills. One day assets will be processed there and it is only a question of time. Not adding to his position right now.
(A Top Pick March 4/13. Down 21.52%.) Has about $450 million in cash on their balance sheet. At the beginning of this year, they announced that in the following year they are going to see lower production and higher cash costs and the market decided they didn’t like it any more. Also, one of the managers in Turkey resigned today and that hit the stock. Still thinks it’s a good company and still likes and would consider adding more to his holdings.
Gold. Reached a Golden Cross technically in the last few days. These can be short-lived, but hopefully this will stay around for a while and mean that the next phase will be the new bull market. He is very encouraged by it. Starting to see interest from the US, the generalists seem to be coming back and we are seeing interest out of Asia. He sees 2 things at work. 1.) Money printing. They may increase quantitative easing, but right now they are decreasing it, but printing is going to go on for the foreseeable future as we run these big budget deficits. 2.) Believes the Chinese are going to continue to buy gold. They have been taking physical delivery of gold in record amounts.