Updating on our picks
Difficult markets, but picks are doing well
Markets are tricky at the moment. A strong US dollar has sent tech, metals and many other asset classes besides, on a painful downward spiral.
With this in mind, I thought I should update paid subscribers on progress with of our picks.
Let’s start with the gold stocks.
I’m quite proud of the fact that even though gold has lost $180 since early March, our gold stocks have beaten the market, held up well, and remain in the black from where we bought.
These are not easy investment markets. Everyone’s a genius in a bull market. Bear markets are much harder, and this is a bear market.
Moneta Gold (ME:TO), which we recommended at C$2.02, is up 25% at C$2.50. The two big catalysts for the company remain in play.
First, there is the updated mineral resource estimate, which - we hope - is going to take Moneta’s total gold ounces from 8.4m above 10m. A 10m oz gold resource in the heart of Canadian mining country trading at US18.50/oz is going to be hard for a major to ignore. That’s why I think this company will be bought out.
That resource estimate is due any day now, perhaps as early as next week.
The next challenge for Moneta will be to demonstrate how mine-able those ounces are. To this end, we should see an updated and expanded preliminary economic assessment (PEA) before the end of June. That will be the next catalyst for the stock.
A danger is that it announces a 10m oz resource while gold itself is weak and investors, reflecting the poor sentiment of the broader market, sell into any positive news that comes out of the company following the maxim of “buy the rumour, sell the news”.
I wish we were getting some help from the gold price, but we are not. However, gold will not remain weak forever, so I am sticking with my C$5 target for Moneta and will update subscribers as soon as we get news from the company.
Turning to our second gold stock, my single biggest position.
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