gold prices
NEW GOLD $3.02 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold .com; Shares outstanding: 509.1 million; Market cap: $1.4 billion; No dividends paid) has four mines: the Mesquite project in the U.S., Cerro San Pedro in Mexico, the Peak mine in Australia and the New Afton mine in B.C.
New Gold also owns 30% of the El Morro copper/ gold project in Chile, 100% of the Blackwater property in B.C. and 100% of the Rainy River project in Ontario.
In the three months ended June 30, 2015, New Gold’s cash flow per share fell 8.3%, to $0.11 from $0.12 a year earlier. That’s because the company’s gold and copper production fell, as did prices.
...
New Gold also owns 30% of the El Morro copper/ gold project in Chile, 100% of the Blackwater property in B.C. and 100% of the Rainy River project in Ontario.
In the three months ended June 30, 2015, New Gold’s cash flow per share fell 8.3%, to $0.11 from $0.12 a year earlier. That’s because the company’s gold and copper production fell, as did prices.
...
Penny stock Semafo aims to multiply its gold production with a big West African acquisition—and we assess the opportunities and risks
NEW GOLD INC., $3.00, symbol NGD on Toronto, has four mines: Mesquite in the U.S., Cerro San Pedro in Mexico, the Peak mine in Australia and the New Afton mine in B.C. The company also owns 30% of the El Morro copper/gold project in Chile, 100% of the Blackwater property in B.C. and 100% of Ontario’s Rainy River project. New Gold has just agreed to sell its El Morro stake to Goldcorp (Toronto symbol G) for $90 million in cash, 4% of El Morro’s gold production when a mine is built, and the cancellation of a $93-million loan from Goldcorp....
Semafo, $3.35, symbol SMF on Toronto (Shares outstanding: 294.1 million; Market cap: $985.2 million, www.semafo.com), is a Canadian mining company that produces and explores for gold in western Africa. Semafo operates the Mana mine in Burkina Faso, which includes the high-grade Siou and Fofina deposits. To add growth prospects, the company completed its $138.2-million acquisition of Orbis Gold earlier this year. Orbis’s Natougou project, also in Burkina Faso, holds as much as 1.1 million ounces of gold. Semafo is now conducting a feasibility study on the economics of building a mine at the site. Orbis also owns the Nabaga project, 250 kilometres south of Natougou....
Thompson Creek Metals Co. Inc., $0.72, symbol TCM on Toronto (Shares outstanding: 220.9 million; Market cap: $152.4 million, www.thompsoncreekmetals.com), owns the Thompson Creek molybdenum mine in Idaho, a roasting facility in Langeloth, Pennsylvania, 75% of the Endako molybdenum mine and mill in B.C. and 100% of the Mount Milligan copper/gold mine, also in B.C. Molybdenum prices have fallen to 12-year lows, forcing Thompson to shut down both the Thompson Creek and Endako projects. Molybdenum is either mined directly or recovered as a by-product of copper mining. The metal strengthens and prevents rust in alloys and high-temperature steels. Thompson’s results now rest on Mount Milligan, which has yet to fully resolve the operating problems it has experienced since it started up early last year. Copper and gold prices also remain low, and the company’s weak balance sheet adds a lot of risk: it holds cash of $238.2 million U.S., but it also has a high $865.1 million U.S. of long-term debt....
NEW GOLD INC., $2.85, symbol NGD on Toronto, recently started building a mine at its 100%-owned Rainy River project in Ontario. It aims to start production in mid-2017 at an average of 325,000 ounces of gold annually over nine years (along with silver as a by-product). The company has now entered into a $175-million streaming agreement with Royal Gold (Nasdaq symbol RGLD) to help fund Rainy River (all figures except share price in U.S. dollars). Royal will pay $100 million at the start of the deal and the remaining $75 million when the mine is 60% complete (projected at mid-2016)....
ALAMOS GOLD $4.36 (Toronto symbol AGI TSINetwork Rating: Speculative) (604-681- 2802; www.alamosgold.com; Shares outstanding: 127.4 million; Market cap: $1.5 billion; No dividends paid) is the company formed by the merger of Alamos Gold and Stock Pickers Digest recommendation AuRico Gold. The combined firm owns the Mulatos mine in Mexico and the Young-Davidson project in northern Ontario, which holds as much as 5.6 million ounces of gold. Young- Davidson started up in 2013 and will reach full production in 2016. But meanwhile, it’s moving from open-pit to underground mining, which will sharply increase its costs. Alamos Gold holds cash of $358.0 million, which it will use to fund the Young-Davidson mine and boost the combined firm’s gold output from 400,000 ounces this year to 700,000 in 2018....
Here’s the text of the quarterly letter I recently sent to our Portfolio Management clients:
“Most investors find they improve their investment results when they invest conservatively. Speculating can pay off from time to time. But the gains are generally too small and/or too rare to offset the losses, and still provide a reasonable rate of return. More often, investors find they have a net loss on their speculative activities over a period of years. However, it is possible to get lucky.
Mr. W., one of our portfolio-management clients, loves his job as a high-school guidance counselor. But he recognized early in his career that it was never going to finance the lifestyle he wanted to provide for his family. So for the first couple of decades of his investing career, he tried to make his fortune as a speculator. He tried buying penny stocks, selling short, options trading and futures trading. That worked out as it does for most investors. His gains were enough to keep him in the game, but too little to provide a worthwhile financial return, much less justify the time he spent.
In middle age, he quit speculating and began dabbling in various small business ventures. Gains were irregular here as well. Then he bought a downtown Toronto rooming house. A couple of years later, an offer from a property developer put a highly rewarding end to his sideline as a rooming house operator. He then hired us to build and manage a conservative investment portfolio for him.
Then lightning really struck. Mr. W. has just acquired a large holding in a well-known Canadian gold mining company. He got the stock as a result of the success of an investment he made in a grubstaking syndicate after he sold the rooming house. When added to his portfolio, the stock made up 20% of its total value. This left Mr. W. with a dilemma: Should he hold on to the stock, even though it left him with an inappropriate and risky portfolio balance? Or should he sell all or part of it, and pay capital-gains tax?
...
“Most investors find they improve their investment results when they invest conservatively. Speculating can pay off from time to time. But the gains are generally too small and/or too rare to offset the losses, and still provide a reasonable rate of return. More often, investors find they have a net loss on their speculative activities over a period of years. However, it is possible to get lucky.
Mr. W., one of our portfolio-management clients, loves his job as a high-school guidance counselor. But he recognized early in his career that it was never going to finance the lifestyle he wanted to provide for his family. So for the first couple of decades of his investing career, he tried to make his fortune as a speculator. He tried buying penny stocks, selling short, options trading and futures trading. That worked out as it does for most investors. His gains were enough to keep him in the game, but too little to provide a worthwhile financial return, much less justify the time he spent.
In middle age, he quit speculating and began dabbling in various small business ventures. Gains were irregular here as well. Then he bought a downtown Toronto rooming house. A couple of years later, an offer from a property developer put a highly rewarding end to his sideline as a rooming house operator. He then hired us to build and manage a conservative investment portfolio for him.
Then lightning really struck. Mr. W. has just acquired a large holding in a well-known Canadian gold mining company. He got the stock as a result of the success of an investment he made in a grubstaking syndicate after he sold the rooming house. When added to his portfolio, the stock made up 20% of its total value. This left Mr. W. with a dilemma: Should he hold on to the stock, even though it left him with an inappropriate and risky portfolio balance? Or should he sell all or part of it, and pay capital-gains tax?
...
ALAMOS GOLD $4.36 (Toronto symbol AGI TSINetwork Rating: Speculative) (604-681- 2802; www.alamosgold.com; Shares outstanding: 127.4 million; Market cap: $1.5 billion; No dividends paid) is the company formed by the merger of Alamos Gold and Stock Pickers Digest recommendation AuRico Gold.
The combined firm owns the Mulatos mine in Mexico and the Young-Davidson project in northern Ontario, which holds as much as 5.6 million ounces of gold. Young- Davidson started up in 2013 and will reach full production in 2016. But meanwhile, it’s moving from open-pit to underground mining, which will sharply increase its costs.
Alamos Gold holds cash of $358.0 million, which it will use to fund the Young-Davidson mine and boost the combined firm’s gold output from 400,000 ounces this year to 700,000 in 2018.
...
The combined firm owns the Mulatos mine in Mexico and the Young-Davidson project in northern Ontario, which holds as much as 5.6 million ounces of gold. Young- Davidson started up in 2013 and will reach full production in 2016. But meanwhile, it’s moving from open-pit to underground mining, which will sharply increase its costs.
Alamos Gold holds cash of $358.0 million, which it will use to fund the Young-Davidson mine and boost the combined firm’s gold output from 400,000 ounces this year to 700,000 in 2018.
...
A Canadian ETF with U.S. stocks promotes low volatility through beta ratings, but we recommend cost-effective ETFs matching a broad index.