GOLD 0.51% $1,391.7 gold futures

gold stock buying strategy, page-10

  1. 1,233 Posts.
    lightbulb Created with Sketch. 146
    Another thing to keep in mind, that has been very significant, in this gold bull is the take-over consolidation activity. The percentage moves this has created in the big producers has been at least equivalent to good exploration news in a junior.

    With the explorers there is always a good wait before they hit paydirt and most of the time it is hype and fast moves. A significant interestection or discovery can take years to bring to production and then most of the time not. Best to sell spikes in these and not hang on in loving dotage of a dog that finally does a trick. I have been burnt a lot in the past.

    Two juniors that are attractive are the much touted RBK, there is a good chance they will be taken over by either Ashanti or Resolute. They also have a chance to add to reserves by exploration and they are also at a reasonable value now. You thus get a crack at big move from a number of angles.

    The other junior is GMS. They have some excellent exploration targets in Sardinia which will be drilled by Barrick very soon- I expect news in the next 2-3 months. The targets are low sulphidation epithermals which have an excellent chance to produce big chunky drill interesections and on the basis of surface exploration there is a very good chance to get drilling results that will produce a short sharp spike in price. There is a problem with GMS- they have a huge number of shares on issue and are quite overvalued. This is one I would accumulate a few now, flog the spike when it comes and then maybe buy back in depending on a assesment of their long term prospects RE: size of deposit , potential take over by Barrick etc.

    I do not own either RBK or GMS.

    Prefer BDG as they have weight in ounces and are in my opinion way undervalued. They are fully funded to production and even though their gold resources are not defined by drilling, you have a far better bulk sample than drilling would ever provide by historic mining and production of over 20 million ounces of gold.

    Excepting deposits that were historically closed at depth such as Mount Morgan in Queensland. Almost without exception the big old elephants have produced when reoperned at depth of by taking in lower grade wall rock e.g. Ashanti, the Witswaterrand, Homestake mine, Kalgooli, Bibiani. I the 80s most of the Western Australian mines were re-vamped deposits from the 1800's and turn of the century excepting Plutonic and Kanowna Belle. In my way of thinking BDG is very low risk.

watchlist Created with Sketch. Add GOLD (COMEX) to my watchlist
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.