The Brains Trust - 2015, page-164

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Anton Chigurh

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06/01/15

11:55

Post #: 14542077
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Originally posted by loki01 ↑

Pisces

NST and RRL are the goldies recommended by brokers as the safer gold plays. There is a crowding effect pushing up their share prices I suppose. They have the advantage of lower country risk, lower costs, a falling AUD, and scale of operation. It will take a major panic for their share prices to get back to their recent lows. In December GDXJ off loaded a lot of the smaller cap goldies and bought RRL (and actually sold down some of its NST holding).

As I mentioned last year, I expected a bit of a bounce in the goldies in the first 6-8 weeks of 2015 - the usual seasonal effect from Chindian buying. The concern is what happens to the POG once the seasonal effects wear off. It could get pretty ugly.

The lower oil price is very positive for the goldies as it is a major input cost. Other input costs have also been falling, so perhaps even if the POG heads down to USD1000 a lot more of them may be able to survive.

2015 is expected to be the year when mine supply peaks (perhaps it already did in 2014 as there has been some mine closures/restructuring of operations). At the current gold price there is not a lot of exploration being undertaken and few projects are going to get into production. So, assuming gold demand holds up (and even goes higher with Chindian growth) then this year could see the low for gold for this cycle. Most of my "gurus' still see gold heading to or below USD1000/ounce in 2015.

I feel uncomfortable chasing goldies now that the move has started, even though some of them still look cheap, because once the seasonal gold buying ends goldies prices just drift lower (or at best go sideways) for months. I was hoping for gold to have a $100 jump to USD1280. That may have been possible in the past when it reacted to geopolitical events but the market has got bored with them and is not responding. Some turmoil in the EU could be positive for gold, I suppose.

For some reason I managed to avoid buying the better goldies (such RRL, NST) and am hoping my doggies provide a good run at some stage - they are all up, but I could and should have done better in my selections. I have expectations of RSG going forward becoming a low cost producer in Africa, and perhaps PRU will get its costs below USD1000 and find the money to develop its second mine in the Ivory Coast.

Happy hunting to all.

loki

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Good post Loki and even better post on the weekend XJO thread - agree completely with your thoughts over there!

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The Brains Trust - 2015, page-164

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Cauldron discovers shallow uranium up to 2km at WA's Yanrey

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HotCopper users smell capital raising as 88 Energy says "significant update" at Phoenix

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The Brains Trust - 2015, page-164

Top Stories

FDA hands Paradigm Biopharma guidance to re-jig phase 3 osteo trial – or is it a delay?

Harvey Norman clocks subdued gains as Echo Law's junk warranty class action kicks off

Cauldron discovers shallow uranium up to 2km at WA's Yanrey

BPM Minerals hits high-grade gold at the Claw Project WA; shares jump 86%

HotCopper users smell capital raising as 88 Energy says "significant update" at Phoenix

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