I totally agree that Jeff Christian is one of the gurus on gold and I follow his work via his discussions on Financial Sense Newshour blog, and articles. Some weeks ago I posted on the gold thread his recent view that gold had topped for this cycle and would be range bound between USD1400-1800. Nobody gave me a thumbs up or offered any views on that article. I wonder why? I also like Rick Rule, David Galland and Doug Casey, who sometimes provide more realistic insights into the gold mining industry.
KGD is a goldie I follow. It is one of the very few operators in PNG I would consider worthwhile. I do not like investing in PNG, but KGD is operating on a small island where things should be a lot safer. KGD is one I think that needs to be considered against some of the better explorers such as GRY, AMX, and PVM. There will be pros and cons against each of them, with management, country risk and access to capital being three key factors.
At present I only have very minor holdings in pure explorers (ROL, AZH) and would not consider investing in them before there is a major turn in the commodities sphere.
I have tried to conserve cash and am mostly invested in SLR and PGI with much smaller holdings in CGX and MUN (a well loved/hated dog). At its current price i would normally be buying more SLR, but unfortunately I had some losses on NMG (now out) and another big hope of mine, PGI, is beginning to stink a fair bit. They are supposed to be about ready to produce but are running out of cash at a bad time.
So I sit and am too scared to buy goldies at what on the surface looks like bargain prices. If Jeff Christian is right then $USD1400 as a bottom is nothing to fear for low/lower cost goldies such as SLR, especially for Oz goldies which are likely to face a rising AUD POG and possibly lower labour costs if the mining boom falters.
I hope for all the MCO followers that things do turn there. It is a pity they did not get a proper CEO years ago. At least the processing infrastructure is now in place, so once they find higher grade gold there should be an upturn, especially once they become cashflow positive.
Thanks for your comments on the costs of underground mining at KCN and RMS, which I think is also running out of high grade ore at WD. It probably explains in part why SLR fell so much - there seemed to be an almost immediate fall in the share price once the SLR quarterly report came out.
As I have written elsewhere I can still see a lot more weakness coming in the market, so I do not think I will add more shares until there is more money printing in the US and perhaps China. Fundies will continue to be under pressure and the shorters know that, IMO. This period is like what was faced last year, except that China/India are weaker this year while the European crisis is getting more critical. The US has the cleanest dirty shirt. The USD is the safe haven for now. I expect the election of Romney should be positive for markets, as will the end of our Red Baron for us.
loki
SLR Price at posting:
$2.17 Sentiment: LT Buy Disclosure: Held
