Eric O's Favorite Gold Miners

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Mon, Jun 20, 2011 - 11:17pm RockinJohnnyT
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Agreed

Agreed - Chris is great and extremely accessible. Always willing to help educate people on metals and mining. I've learned quite a bit from him.

Can I offer you a drink? How about this expensive prostitute?
Tue, Jun 21, 2011 - 7:41am
murphy
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take overs

Are mining producers such as EGO, MFN, GORO and ANV too large to be taken over by larger companies. I believe what Sinclair and Norcini say that juniors with deposits are ripe to be bought out. What about these larger, money making miners? I would ask the same question about some of the silver ones as well. SVM, and Fresnillo.

Tue, Jun 21, 2011 - 9:28am
Eric Original
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JUst guessing here

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With the smaller guys, it's oftentimes part of the plan to find a deposit and then shop it around for a buyer. The small guys often don't have the access to financing and development expertise to bring something big to production, so that means that it's fertile ground for the majors to get access to some big finds at a good price.

With a bigger company, I wouldn't say they are "too big" to get bought, but how often are they available at the really attractive terms/prices that the majors crave? Usually only in a tough bear market. The majors don't like to pay fair market value for anything. They like to steal stuff at bargain prices, which in my opinion, is what they do to the juniors with some regularity. There is a conspiracy school of thought that a lot of this vicious naked shorting of the juniors lately is being orchestrated by some of the majors in order to drum up some bargain purchase opportunities.

My opinions are colored by my experiences. We like to read about how so-and-so miner got bought out for a ton of money. But more often, for me, I own something that finds a really nice find, and then they end up giving it away to a major for a song. Bah!

I like the small to mid-size producers. These are the guys who had the balls to plunge ahead, get to production on their own, and tell the majors to stuff it along the way.

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Tue, Jun 21, 2011 - 10:34am
murphy
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@eric

Thanks for your take. Interesting thought that the majors are shorting the miners as well in addition to the Fed's primary dealers (crooks) and the hedge goons.

All my miners are green today, yea! BTW, remember I mentioned GORO two days ago? Only went up 20% since then!

Tue, Jun 21, 2011 - 1:13pm Steampunked
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I'd stay away from Mai for

I'd stay away from Mai for now. I don't think the pending merger with USGold will do any favors for Mai shareholders. All USGold really brings to the table is their Gallo silver property which is years from production.

Tue, Jun 21, 2011 - 1:46pm
Eric Original
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Kirkland Lake Gold (KGILF) (KGI in Canada)

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Market Cap of around $1B. Current production running at a rate of 120,000 per year, ramping up to 200,000 over the next couple years. The sizzle on this one is the location. One of the preeminant old Canadian gold camps, The Kirkland Lake Camp historically produced something like ​40Million ounces ​of gold. They've consolidated the best part of the camp, 5 historic mines that accounted for more than half of the total, with all infrastructure in place. The best place to find gold is where it's been found before. Any gold left? They are drilling like mad, finding gold all over the place. How does 8 ounces per ton over 46 feet grab you? Here's a snippet from the May 24, 2011 news release:

“This is a world class intersection. Although the Company does not routinely announce the assays of drill holes which pierce existing reserve or resource blocks, this particular drill hole deserves some attention. The combination of grade and width would make this intersection the richest in the 100 year history of the Kirkland Lake Camp,” said Stewart Carmichael, Chief Exploration Geologist.

Another way to play the area is with Queenston Mining. More acres, less historic production, no current production, and about half the market cap.

Here are the corporate presentations from both Kirkland and Queenston:

https://klgold.com/pdf/reports/KGI_MAY_17_2011_Presentation.pdf

https://www.queenston.ca/investors/pdf/qmi-corporate-presentation.pdf

​I love the whole concept of these old Canadian underground gold camps getting another day in the sun. This is a keeper.

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Tue, Jun 21, 2011 - 2:48pm
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Thanks!

Thanks for this thread Eric. Looking to start dipping my toes into miners a bit and this info is very helpful. As a newbie to this part of the market, what would be your rough market-cap definitions for small, medium & large?

Tue, Jun 21, 2011 - 3:10pm
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Argh: Looks like I missed this thread by a day . . .

My miners list on my trading watch list is green baby green. Was keeping powder dry and missed this boat.

Thanks for the excellent work in this thread nonetheless, something for me to pay closer attention to with price alerts.

"When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it." - Frederic Bastiat http://en.wikiquote.org/wiki/Fr%C3%A9d%C3%A9ric_Bastiat
Tue, Jun 21, 2011 - 6:18pm
Eric Original
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Tringo

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I get the feeling that a lot of people on this blog focus on small cap miners, from just a few million up to maybe $500 million. Personally I'd still count them as small cap up to maybe $1 Billion. Then Mid Cap from say $1B up to $10B, then big cap after that. Barrick, for instance, runs about $44B. These are numbers I'm just coming up with off the top of my head. Didn't check with any "official" definitions or anything.

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Tue, Jun 21, 2011 - 6:27pm
Eric Original
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tread

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GDXJ has been my benchmark for a while. 34 was serious support all this year. Broke below it into the 32's in the last couple days, but today reclaimed that hill, closing at 33.99. I'm very encouraged by this action. I don't think you've missed anything.

Like I always say, in the short run anything can happen. And I mean ​anything. But give the miners 6-9 months and you'll be kicking yourself that you didn't load up on miners at a GDXJ of 34. That's my story and I'm sticking to it.

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Tue, Jun 21, 2011 - 6:45pm
Eric Original
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small caps & Silvers

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Tue, Jun 21, 2011 - 7:16pm
Eric Original
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Lake Shore Gold (LSGGF) (LSG in Canada)

I think of Lake Shore Gold as a twin brother of Kirkland Lake Gold (discussed above). Lake Shore has a great position in the Timmins Gold Camp of Ontario, which, at 70 million ounces ​of historical production is even bigger than the Kirkland Lake Camp. Same sort of story: Bringing the great old mines back to life, infrastructure and permits all in place, lots of gold still in the ground. Market cap around $1.25B, really getting up to speed in 2011, now producing at a rate of 125,000 annually. Great drilling and growth opportunities abound. Like Kirkland Lake, I think Lake Shore only really limited by how fast they can drill, and how fast they can increase milling capacity.

Here's a presentation:

https://www.lsgold.com/SiteResources/data/MediaArchive/pdfs/presentation...

Also a keeper in my book.

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Tue, Jun 21, 2011 - 7:39pm
Eric Original
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Timmins Gold Camp

Another way to play the Timmins Gold Camp is with Rob McEwen's Lexam VG Gold. LEXVF, LEX.

Smaller, more aggressive play. Good properties bordering Goldcorp's huge mines in the area. No current production, but they have a huge drilling program underway. Much much smaller market cap at around $140 million. Plus Rob McEwen's magic touch, which counts for a lot!

Here's their presentation. McEwen always does a great presentation, and this one has great maps to help you figure where exactly GoldCorp, Lake Shore, and Lexam are located. San Gold is another player in the area.

https://www.lexamvggold.com/pdfs/2011%2006%2016%20Lexam%20VG%20Presentat...

I don't own this one right now. Kinda wish I did, but I had to unload it a while back because I just plain had too many names. Thinking about buying it back.

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Wed, Jun 22, 2011 - 2:06am
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I have tranches (2 0r 3 positions) in ...

EGO, GG, AUY. A very high partial position in SLW, after trading it wonderfully last year...

Small buys of TKRFF, GPL.

In my Roth, I hae EGO, GG, AUY, small core of GDX and GDXJ

"Optimist look at donut; pessimist look at hole."--Charlie Chan (That's my dog SLICKER, not Nipper)
Wed, Jun 22, 2011 - 3:51am Insight
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If you like SLW......

Insight wrote:

EGO, GG, AUY. A very high partial position in SLW, after trading it wonderfully last year...

Small buys of TKRFF, GPL.

In my Roth, I hae EGO, GG, AUY, small core of GDX and GDXJ

If you like SLW then you should like SSL.V (SNDXF.PK) - Sandstorm Gold Ltd.

https://www.sandstormgold.com/s/Home.asp

I just added some yesterday.

Wed, Jun 22, 2011 - 9:17am
Eric Original
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Timmins Gold (TMGOF) (TMM in Canada)

First off, let me make it clear that Timmins Gold has absolutely no connection to the legendary Timmins Gold Camp that I discussed earlier. Their operations are all in Mexico. Seems like false advertising, and it kind of bothers me. But with that off my chest, let's get to the good stuff.

Market Cap of $315 million. What they've done is taken an old played out open pit heap leach mine (the San Francisco) and brought it back to life. Done a nice job too. 100,000 ounces per year production rate, budget and production costs all right where they said they would be. Step out drilling all around the pit is finding more ore, so it also looks like the life of the mine will be much longer than originally thought.

I first heard about Timmins when they were aggressively trying to outbid Gammon Gold in the battle for Capital Gold. They lost, but I liked their style.

The lottery ticket component here is a huge amount of blue sky exploration land (the Canadians call it "moose pasture", but that might not fit the Mexican desert). Something like 250,000 hectares of good looking rocks to kick, but I don't think they've really done a lot with it yet. They've been focused on getting the San Francisco up and running so far.

Sprott is involved in the financing of the company, and that's always a good sign.

All that having been said, I remain strangely lukewarm about this one and I can't quite put my finger on why.

Is it because the CEO is a securities lawyer from Vancouver? Maybe, but still, the operational success of the company so far has been excellent.

Is it because they are using a contract miner at the San Francisco? The results speak for themselves, but still I'd be happier if they were running it themselves.

Do they even have the capability of exploring their huge land package? No idea. Not seeing any exploration news so far that gets my blood boiling.

Links for more info:

https://www.theaureport.com/pub/co/623

https://www.timminsgold.com/i/pdf/CorporatePresentation.pdf

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Wed, Jun 22, 2011 - 10:51am
Eric Original
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Wow, how 'bout that ANV, eh!

Looks like it's up 18% so far this week. Yay!

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Wed, Jun 22, 2011 - 1:20pm Eric Original
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GORO

Hey, went from $22 to $27.60 this week too!

Wed, Jun 22, 2011 - 5:16pm
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Kam

Hi Eric, Kaminak had a great day today. If you Remember, it was underworld that started things off In the white gold area of the Yukon. The underworld Team are back in business with smash minerals, SSH, not one I own yet but on my watch list. A very very promising day today I believe, with General stocks down and miners going up Wow, when was the last time we saw that ?

Wed, Jun 22, 2011 - 5:23pm l'idiot du village
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Harfwit

harfwit wrote:
A very very promising day today I believe, with General stocks down and miners going up Wow, when was the last time we saw that ?

I know. It's like some beautiful, beautiful dream. Don't wake me up.

Did you see Minera Andes today? Holy Cow.

This isn't a metals blog anymore. It's a right wing circle jerk, masquerading as a metals blog.
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