In this update....
- Company News
- Premium Sample
Friday we published an article arguing for a Secondary Bottom in Gold Stocks.
We don't make strong statements that often but I could remind you of our article in the middle of May, Major Bottom could Occur this Week and in early August we penned this, Precious Metals Short-Term Outlook is Bullish.
May did prove to be a major bottom for the sector. Sometimes it takes a few weeks or even a few months to know the answer. By the end of January I do believe that we will have confirmed another higher low for this sector (and the stocks specifically). As always, make sure you are in stocks which will lead the move higher.
Also, I'm getting ready to send this and I noticed a similar article from Chris Puplava at FinancialSense.
Corvus Gold put out a new preliminary economic assessment for a two-stage operation at North Bullfrog.
On the surface the 5-year payback figure looks undesireable, but you have to separate the two phases. The total capex is $95M. The bulk of that will be spent up front. Once phase 1 gets going, Corvus will generate cash flow which can be applied to the remaining $35M capex required for phase 2 which will generate roughly an average of 80K oz Au from 2016-2019. Furthermore, this PEA does not include the high grade results from 2012. This all explains why Corvus shares have had a tremendous run. What is the potential going forward? You'll have to subscribe to get our view!
Shareholders of Argonaut Gold and Prodigy Gold have approved the deal and it looks to be completed in the next week. Argonaut has further solidified what arguably is the best pipeline amongst the growth-oriented producers. The stock has been a horse for TDG Premium subscribers but we took profits and reduced the position while Argo shares were trading in the mid $10s. Several years from now I expect Argo to be trading at $25-$30 and perhaps more. There will be a time to increase our position.
Friday morning we sent a brief email update containing extended commentary on some of the stocks we are following. We recently took profits on an exploration company but upon new information (both technical and fundamental) we admitted our error. We didn't delve into the PEA. Someone unfamiliar with Corvus could make the same mistake. This company's recent share performance has confirmed that we were wrong in our decision. We have added the company back to our watch list. By the way, this is why technical analysis and having the acumen, is critical. It provides a check on your decisions.
We are waiting for this coming bottom to play out and have a watch list of companies which we may or may not add at anytime. One thing I want to note is the junior exploration sector looks increasingly interesting. These companies are being given away. Consider that the juniors always outperform the sector when Gold makes its big breakouts. That is what happened in 2003, 2006-2007 and after 2009. Gold is not far from $1800-$1900 and these stocks are being given away.
One reason we've profited in 2012 is we've mostly avoided or under-weighted the exploration sector (though we did luck out with Corvus and profited on the aforementioned company). My guess is the model portfolio could potentially contain three or four exploration companies by next fall. We have to be very picky and figure out which companies will be 5 and 10 baggers and which don't hold that promise.
We'll be discussing this in future premium updates as we are updating reports on the companies we follow. As soon as you subscribe you receive access to a 40+ page document which contains our most recent reports on 10-12 companies. These are the reports we will be updating this month, in addition to a few new reports. So this is really an excellent time to become a subscriber.
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Wishing you health and profits,
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