Today, Jerome Hass and Rick Rule commented about whether DC.A-T, BCG-X, DEE-T, ALS-T, RMX-T, BYU.H-X, BAR-T, TGZ-T, LUN-T, YRI-T, LSG-T, DGC-T, ELD-T, CG-T, VGQ-T, RMC-X, IVN-T, KAM-X, FCU-T, ROXG-T, MND-T, RIO-T, RRI-X, SCL-T, FRU-T, JE-T, DRWI-T Dead), AFN-T, AAR.UN-T, DSG-T, PHM-X, ECI-T, TPH-T, E-T, DEL-N, GSY-T, CXI-T, SFD-T, BVD.UN-X, HNL-T, EIF-T, SCB-T, HCG-T are stocks to buy or sell.
Golds. History has shown that gold stocks are stocks, so as stocks decline, gold stocks will decline as well. Looking into the intermediate longer-term, it will be a function of why a correction occurred in the broad market. If a correction occurs in the broad market as a consequence of market nervousness about the euro or the dollar, that could theoretically be very good for gold. Conversely if there is a global liquidity crunch, it would probably be bad for all asset classes. With the situation in the Ukraine, sabre rattling has generally been good for gold. Gold can tend to act as catastrophe insurance. As an American, he juxtaposes gold against what he calls anti-gold, which is the US 10 year treasury. Thinks the US treasury has had a spectacular run. Believes the underlying premise of the U.S. Treasury, paying 2.7%, in a world where it feels like purchasing power is depreciating at 5% compounded, suggests that the promise behind the U.S. Treasury is that they will take 2.3% of his wealth, guaranteed every year, for 10 years. Looking at this, he feels that gold is very cheap, or conversely that the US 10 year treasury, i.e. the US$, is very expensive.
Ring of Fire. Are any of the companies in this area in North Western Ontario of interest? They are. He hasn’t played the game yet because the exit of Cliffs as a consequence of their exit strategy, means that the area is going to be under funded for 1-1.5 years. He will be very interested in that area, but it is probably a year too early.
Prospect Generators. With this, you are investing in process. You are buying a portfolio of them because you are going to participate in discoveries. Statistically it is the best chance to participate in a discovery. Which name is going to work? He doesn’t know. When is it going to work? He doesn’t know. What he does know is that if you have a group of 5 to 7 Prospect Generators, you will participate in a large discovery. The probabilities of that are better than any other probabilities in exploration financing in Canada or any other country.
An absolutely top quality team. First-class implementers. Stock has had a reasonably good run. It might be a safe place to hide out right now, but if you own it now, you need to be prepared to own it for awhile while it consolidates the gains that it has enjoyed, and while it puts the rest of the Elgin assets to account. 3% dividend yield.
High-quality deposit and very good grade. It’s going to make money. He would suggest that after a 100% run in 12 months, the stock needs to digest some gains. Looking out longer, it is going to be a bit gold price sensitive. It really depends on your patience and duration and your feeling towards the gold price.
Tough to find an attractive entry point. Organic growth as well as tuck in acquisitions. Thinks eventually it could get taken out.