Gold Mining Stocks

[tinhat]

There is an active thread Gold Price - Where is it heading?, and an inactive thread "gold stocks", but I would like to discuss gold mining stocks. I know we discuss gold mining stocks a bit in the Gold Price thread but maybe they need their own thread.

At the moment I am holding MML and SLR. I bought both on the 8 March and currently am up 5% on MML and down 3.8% on SLR. I have NST on my watch list. I generally try and buy stocks which I feel are undervalued and which I think have sound fundamentals. Thus these three stocks meet my criteria. I try and buy on momentum. With these gold stocks though, I am looking to ride what might be either a relief rally (short lived???) or a turnaround. Time will tell. So I am speculating.

 

[notting]

NST was absolutley crakers on Friday.
Leave the little relative low ball high ball, buy sell, orders in on almost any of them and let the ping pong ball do the rest.
If you didn't get long on the dogs of the ASX 20, who cares? Why wait for that dip as they say?
There is still a party to be Played in the chaos of the gold space.

Resources are warming up too.
Love the relatively oversold shenanigans.

 

[So_Cynical]

With my mind set and my previous experience with gold mining stocks...i just cant buy into gold at the moment, POG can go either way and the sector in general is still not cheap (historically cheap) while there appears to be some value emerging, for me its just to early.

Better to let the big moves play out first.

 

[mr. jeff]

RRL is the most likely candidate to give a decent bounce, it is favoured by the larger money and is sitting above a key level at 4.25 - based on the pattern I am seeing of large gold stock buying late last week it may be that there is a change taking place in the sector. Could easily be wrong. Perhaps it may be prompted by the movement of uncertain money in Europe which may get more headlines over the coming week.

Other stocks of gold - BDR has fantastic grades and costs. NST has low reserves but is a successful driller, AQG has large resources and has been hammered, SLR as mentioned -> more to come.

 

[CapitalVia]

does Gold always up in market???

 

[tinhat]

does Gold always up in market???

Even if I understood your question I still probably wouldn't be able to answer it. Can you rephrase the question?

 

[mr. jeff]

This is what I am watching right now in the goldies showing a break of trend and a clear level to head to.









All showing a similar pattern of a sustained sell down with the loss of lustre followed by the change of trend.
At this stage ( as with every change of trend) it is uncertain as to whether we will see it stick.

Certainly the MC's of these companies have become more approachable, but big players obviously aren't sure of the future prices for gold and whether there will be increases worth chasing based on a return of strength, particularly in the U.S.

One thing that is up in the air is whether people will begin to rethink holding all currency and whether partial gold is a more safe thing to do. I wonder whether the people of Cyprus considered this earlier - or whether having your cash in physical stacks held in a lock box in the bank would protect you from the proposed tax.

Gold miners are currently in a see-saw in my view and it is not clear that the crazy upwards moves that have been expected will actually eventuate. I have been long gold recently and have only seen a $15 - 20 move since Cyprus started. If this was a major consideration, then surely POG would be heading through 1750 - 1800 right now based on real demand exacerbated by a return of large speculators.

 

[CanOz]

This is interesting....

(CA) According to INK Research, insider buying of gold stocks on the S&P/TSX exchange is at 7:1, a multi-year high - Globe and Mail

I wonder if the same thing is occurring on ASX Gold stocks?

CanOz

 

[FlyingFox]

This is interesting....



I wonder if the same thing is occurring on ASX Gold stocks?

CanOz

Thanks for the update.

 

[catfish]

There are some really cheap gold stocks ATM. I hold red @$1.2 and rms @$0.5. Both appear cheap and would double if there was a substantial change in the direction of POG.

Slr is on my watchlist.

These make up only 10pc of my portfolio and are there as a hedge. I would not expect gold stock outperformance in the recent market. As interest rates dropped the market bought up yielding stocks and sold off stocks like rms slr and red.

If there is a serious correction in the market in the next two years, the POG will show off its inverse relationship and small gold miners which are coming into production will rise strongly.

Always good to have a few gold stocks in the portfolio.

 

[So_Cynical]

There are some really cheap gold stocks ATM.

Problem is they can go a lot cheaper, if POG breaks below 1400 i reckon most of the Aussie gold stocks could see They're share price halved due to the market over doing it.

I'm not stepping in until the argument is compelling...right now its just attractive.

 

[mr. jeff]

Problem is they can go a lot cheaper, if POG breaks below 1400 i reckon most of the Aussie gold stocks could see They're share price halved due to the market over doing it.

I'm not stepping in until the argument is compelling...right now its just attractive.

I definitely agree. Certainly could see a further rush for the exit if POG weakens.

I wonder though if this Cyprus issue will end up manifesting in gold in any way. Certainly to date it has not even blinked which is a surprise to many. Of course time will tell, I can only suggest that perhaps there are still a lot of long positions which were hoping for further US weakness and gold strength and since the recent run have taken the Cyprus event as an opportunity to evacuate their bloated holdings.

This hovering at 1600 is not too worrying though, as all the headlines of this trader and that major hedge fund trader selling their holdings in gold have really not killed the strong price and at $1600 it is still profitable for enough miners to justify further digging and drilling.

Thanks for the sobering up again though, many Aussie speculative plays have not performed at all well lately and this mood could really smash the goldies if the price support was removed.

Cheers.

 

[catfish]

Problem is they can go a lot cheaper, if POG breaks below 1400 i reckon most of the Aussie gold stocks could see They're share price halved due to the market over doing it.

I'm not stepping in until the argument is compelling...right now its just attractive.

I'm not 'stepping in' either . If there is further weakness in POG I would expect my other 90pc to pick up the slack.

I see you have chosen PGI in the April comp.what do you value them at assuming POG stable @1600? They don't provide as detailed forecasts as other miners coming into production, which may lead to some pricing inefficiencies and an opportunity.

I might consider a small PGI of SLR purchase with my recent dividend money.

 

[So_Cynical]

hovering at 1600 is not too worrying though, as all the headlines of this trader and that major hedge fund trader selling their holdings in gold have really not killed the strong price and at $1600 it is still profitable for enough miners to justify further digging and drilling.

Sure, but with a lot of miners producing at around the $900 to $1000 range coupled with the POG breaking below the new sideways channel and under the long term trend...could easily be some panic style selling of goldies and the gold ETF,s

I love a good panic.

-----------------------------

I see you have chosen PGI in the April comp.what do you value them at assuming POG stable @1600? They don't provide as detailed forecasts as other miners coming into production, which may lead to some pricing inefficiencies and an opportunity.

I don't do valuations, picked PGI because its really really cheap (historically) at the moment and based on what the CEO said today.

According to today's ann.

http://www.panterragold.com/userfiles/file/news/26_3_2013 Las Lagunas Project - clarification.pdf

Mr Brian Johnson, Chairman and CEO of PanTerra Gold Limited, said that he was disappointed that the Company’s market capitalisation had recently been reduced to below its investment level in the project and well short of its NPV,

The way i see it all the hard work is done for PGI at Las Lagunas, now its just a matter of making the plant work better and recover more, get closer to planned thru put...at current recovery levels and POG i would imagine they are operating with a small profit margin..

 

[sinner]

In Feb 2012 AngloGold Ashanti CEO, Mark Cutifani claimed avg cost of production for the industry was $1250/oz and by Nov 2012 it was $1350!

My view is that gold miners are getting stuck between a rock and a hard place in the sense that the avg cost of production per ounce of gold is rising closer and closer to the POG which spells declining profit margins for the gold miners as a group. Now that the POG has stopped rising those margins are getting squeezed tighter and tigher every time the avg cost of production creeps up.

Here's the Philly Gold/Silver Miners Index priced in ounces of gold.


and the GoldBug Index priced in ounces of gold

 

[tinhat]

Despite a down day for gold miners today I decided I wanted to end the week out of gold miners so I sold out of my recent buys into MML, SLR and NST and took a loss. The bulls are in control of the stock market at the moment and gold is being sold down. It will be interesting to see whether it can bounce off or at least stay on support around the 1560 mark. I don't have the stomach for gold miners at the moment though. There are less risky buy signals still popping up here and there.

I think there is some great value amongst gold mining stocks at the moment including MML, SLR, NST, EVN but like all commodity stocks it doesn't matter how well run the company is the market price of the commodity is the main variable.

Maybe there will be an opportunity to buy some of these stocks at cheaper prices and maybe I will buy back in at higher prices if a positive trend emerges.

Around the globe the money printing continues but their is an absence of fear at the moment.

This helped me make my decision today:
https://www.aussiestockforums.com/forums/showthread.php?t=6487&p=765659#post765659

 

[tinhat]

Call me completely insane but I just bought some MML at $3.48.

 

[CanOz]

Call me completely insane but I just bought some MML at $3.48.

Are you fading that spike Tinhat?

The best time to fade a spike like that is when the market is "too short"...it's so short that the shorts keep covering, thus preventing the price from dropping much more. Usually this is when lots of new selling has joined the market. I'm not sure we are at that stage yet, but we'll see. I'll post a video of the stops getting hit and the long liquidation, you can judge for yourself if it was new shorts as well. Will post in the gold thread.

CanOz

 

[AdamVW]

Call me completely insane but I just bought some MML at $3.48.

I am indeed heartened by the news that the learned Mr Tinhat has bought back into the market.

I shall disconnect the noose from my rafter forthwith :behead::behead::behead:

 

[skyQuake]

Doubt it'll be over so quick. Too many goldies have cracked significant lows