Gold Miners on the Verge?

Patience, Prospects and Potential: Four Promising Mining Companies To Consider Amidst Rising Gold Prices

We are talking gold mines today. When will I ever learn?

Gold, as I’m sure you’ve heard, has broken out to new highs. There are two things that excite me about this move. First is that is has happened in the face of huge ETF outflows: gold ETF holdings have declined by about 25% over the last 18 months - that is a big number - and those outflows have accelerated in recent weeks as investors have been selling gold ETFs to buy bitcoin ETFs.

Second, is that there is hardly been any fanfare. Bitcoin has been making all the noise. It’s a so-called “stealth breakout”, the best kind of break-out.

That should mean the time has finally come for a turn in the miners. 

Yes and no. Miners’ profits won’t be up nearly as much as one might hope because the costs of mining - whether energy, equipment, personnel, meeting regulatory requirements, permitting delays - input costs, in other words - have all increased by more than gold has.

There is also the ongoing problem of incompetent operators and excess dilution, which leads to the perennial underachievement of mining.

But this relentless, interminable, horrible, protracted bear market looks like it may have finally drifted to an end. If miners can’t rise with gold breaking out to new highs, when can they?

While we haven’t exactly seen an unstoppable rebound, at least the direction of travel is now sideways rather than downwards

GDXJ is as good as proxy as anything for midcap gold mining companies, and here we see the chart. Here’s hoping we have found a low around $30.

Perhaps the time has come to be dipping a tentative toe into the water, if you haven’t already.

Maybe even consider increasing your positions if, like me, you have been one of those that should have taken an early loss, but chose to hold on instead.

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I have a feeling gold is going to come in very handy in the not-too-distant future. If you are interested in buying gold, rather than gold miners, you are a wise person. I have recently put together this guide (see PDF below). My recommended bullion dealer is Pure Gold Company.

Dominic Frisby How To Invest In Gold

4.08MB ∙ PDF file

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Any issues downloading the PDF, try this link.

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When mining stocks are rising, every boat - or should I say turd? - floats. It’s a bit like altcoin season. But even so I try to pick companies that have got something going for them beyond being a just gold miner.

Either they are likely to be taken out, have an extraordinary resource for which they are not getting proper credit, or have competent management that is going to engineer some growth and get the company a re-rating.

We have 10% of the Dolce Far Niente allocated to special situations - the fun part of the portfolio, in theory. Junior gold miners can make up part of that allocation.

With that in mind, here are four companies with the potential to shine brightly in a gold mining bull market: a likely, imminent take-out candidate, a development play, and two emerging producers.

Of all the picks, the first is the one that, for me, has the most immediate chance of fireworks: the likely take-out play.