Please do not share, copy, reproduce or distribute any part of this report without the express permission of the author (me).
Here is another, rather overdue Special Report. I have held off because of the broader market conditions. I don’t know how long this bear market goes on for, but it’s time to start identifying targets to pick up in the carnage, I’d say, while they are on sale.
I am overweight three gold mining companies in my portfolio. If the gold price can rally 20 or 30% and get above its old highs, then I would hope all three should double or more.
Then again the gold price might not rally. It’s gold. It often does the opposite.
And there are bigger factors at play in the financial world: this brutal bear market, which is seeing mass deleveraging. It won’t last forever.
What I like about these companies is that over the next year or so, their development - either via production or resource expansion - will be such that a market re-rating becomes highly likely. A higher gold price would be good, but it’s not necessarily essential to the success of these companies. They’re perceived to be one thing, but a bit of time and effort will soon (in mining time, which is slower than normal time) show them to be something else.
Managements failing to deliver is a common feature of junior resource companies, so I am careful to invest where management have demonstrable previous success doing what they do: especially, building mines and taking them into production on time and on budget.
Obviously, if gold goes to $1,500 my investments will go lower. But, unlike many of those in the 2013-16 bear market, these companies will still survive.
It’s junior mining so as always caveat emptor. But the risk-reward ratio, I feel, is in my favour so that I don’t mind disclosing what companies I have invested in.
Listen to this episode with a 7-day free trial