Gold Medal Victory for Primero Mining

Move over, Michael Phelps!

Under the reliably capable leadership of founding CEO Joe Conway, Primero Mining (NYSE: PPP  ) is rapidly constructing a legacy of golden achievements likely to be recalled as one of the truly great performances of its time.

Scoring a watershed victory in its bid to reconfigure the way that Mexico's tax authority treats the portion of Primero's silver production delivered to stream holder Silver Wheaton (NYSE: SLW  ) , Primero is now free to celebrate further increases in the price of silver alongside this continuing and powerful secular bull market in gold.

Also likely to be celebrating this latest victory for Primero -- aside from 32% stakeholder Goldcorp (NYSE: GG  ) -- are those of my fellow Fools who may have latched onto this story when I called Primero "The Greatest Gold Stock in the World" just over a year ago when the stock traded for $2.39 per share. Rocketing higher by more than 40% Friday morning after news broke of this game-changing positive tax ruling, the shares have already delivered an unforgettable three-bagger run over the period. As the following chart makes clear, Primero's outperformance of relevant benchmarks like the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ  ) or the gold bullion proxy SPDR Gold Trust (NYSE: GLD  ) has been truly spectacular.

PPP Chart

PPP data by YCharts

The updated outlook for Primero Mining
Following a move of this magnitude, an updated and refreshed outlook for the stock going forward is required. My recent decision to lock in a portion of my gains in Primero shares prior to this latest megasurge is now looking a touch premature, but I value the underlying discipline of locking in gains more than I do any notion of doing so with flawless timing. I think it's safe to say that my selection of Primero as my No. 1 gold pick for 2012 has already enjoyed a favorable run, and yet the stock remains a core long-term holding of mine even after booking gains.

I continue to perceive substantial room for further value creation as the company approaches a likely expansion of the San Dimas mine, and continues all the while to build its mineral inventory through the systematic exploration of this legendary gold and silver vein system. Additionally, Primero's newfound market heft -- combined with a healthy cash position of $126 million at last tally -- works in support of Conway's long-standing intention to grow this company through strategic acquisitions while concurrently maximizing value from the flagship mine.

While intentionally sidestepping any effort to predict the near-term trajectory following a move of this scale and duration, my long-term outlook remains solidly bullish from here. Accordingly, I will maintain my bullish CAPScall on the stock as a top pick, and I encourage readers to track my coverage by bookmarking my article list or following me on Twitter. I suspect that some of my other core gold holdings may double faster from this juncture, but ultimately I expect to hold my remaining stake in Primero Mining for a long-term target of at least $14 per share.

Looking for more ideas? Download The Motley Fool's special free report "The Tiny Gold Stock Digging Up Massive Profits." Our analysts have uncovered a little-known gold miner that we believe is poised for greatness; find out which company it is and why we strongly believe in its future -- for free!

Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Goldcorp, Primero Mining, and Silver Wheaton. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (27) | Recommend This Article (33)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 05, 2012, at 3:41 PM, gaminsky wrote:

    Congrats to Primero and to all the fools who invested in PPP. I sold out a few weeks ago at a pretty good profit (I didn't keep any), but I am so happy for all who held on, so they could have a day like today in their portfolios!!!

    "Nobody told me there would be days like these..." ~ JLennon

    Peace out.

  • Report this Comment On October 05, 2012, at 3:50 PM, Jellywig wrote:

    Chris, as a relatively new investor with a family, I am thrilled with this sort of investment - who wouldn't be? My dad wisely encouraged me to have some allocation of physical gold and silver and this got me to consider them as stocks also. I owe you (and my dad) a huge debt of gratitude for your hard work and vision. Thanks and keep em coming!

    John

  • Report this Comment On October 05, 2012, at 3:54 PM, gaminsky wrote:

    Oh, and I forgot to say thank you, Sinchi. I have been following your picks for 2 years now, and you are the reason I made money on PPP.

    I follow Skypilot and Speedy as well (and a few others).

    Great little group of PM investors here.

  • Report this Comment On October 05, 2012, at 5:04 PM, puccini3005 wrote:

    Hooray! My biggest holding - thanks Sinch! I followed your advice into this, well before it got all the way down to 2.39, but still a double at this point. GoldCorp is probably happy too, but might be wishing they had held that big chunk of shares just two more weeks. And gaminsky - how kind and gracious you are, best of luck.

    Thanks again Chris for all the articles.

  • Report this Comment On October 05, 2012, at 5:36 PM, paddlinfaster wrote:

    My birthday was YESTERDAY.

    I bought some PPP back in March @ $2.45.

    Guess which day this week has been my favroite? :) :) :)

  • Report this Comment On October 05, 2012, at 5:49 PM, skypilot2005 wrote:

    Sinchi,

    PPP is my third largest holding in dollar value out of over 80 positions in my portfolios. At today's close, I am up over 113% in just a little over a year holding PPP.

    I bought PPP because of your coverage here at The Motley Fool.

    This is one of the reasons I work for free as your Official Web Link Assistant.

    Thanks, again.

    Sky

  • Report this Comment On October 05, 2012, at 5:59 PM, skypilot2005 wrote:

    http://www.primeromining.com/News-and-Events/News-Releases/N...

    PRIMERO ANNOUNCES POSITIVE ADVANCE TAX RULING

    10/05/2012

    Sky

  • Report this Comment On October 05, 2012, at 6:40 PM, texasflyfish wrote:

    I told someone today: "I love Christopher Barker". Maybe love is too strong a word; respect, admire, listen carefully to.... That's probably closer. I built a diversified portfolio of gold and silver holdings, but Primero was my largest miner thanks to Sinch. I decided not to sell even a small amount because Sinch still thought it had room to run. I made significant money today. Sinch, if you are ever near Texas, call me and I will buy you a great dinner with wine at the place of your choosing.

    texasflyfishing

  • Report this Comment On October 06, 2012, at 1:00 AM, XMFSinchiruna wrote:

    Skypilot,

    I don't say it nearly enough, but it is an incredible service you provide for your fellow Fools by offering so many avenues to further due diligence.

    Gaminsky is right, we do have a great community of pm investors here!

  • Report this Comment On October 06, 2012, at 1:12 AM, XMFSinchiruna wrote:

    Jellywig,

    And surely you'll offer similar guidance to your child/children in turn, and they will likewise be grateful for the timeless wisdom of allocating some portion on one's capital to gold and silver.

  • Report this Comment On October 06, 2012, at 1:31 AM, XMFSinchiruna wrote:

    Texasflyfish,

    Keep in mind that no money is truly made until a profit is at least partially booked, or, alternatively, protected by a trailing stop.

    I will certainly let you know the next time I get back to the Republic of Texas. :)

  • Report this Comment On October 06, 2012, at 1:32 AM, XMFSinchiruna wrote:

    Paddlinfaster,

    Happy Birthday!! :)

  • Report this Comment On October 06, 2012, at 1:46 AM, XMFSinchiruna wrote:

    Puccini, so great that it was your largest holding! Congratulations. Had been my second-largest until recently, and still in my top ten.

  • Report this Comment On October 06, 2012, at 1:56 AM, ath002 wrote:

    Morning Chris, want to echo the words of all the other PM investors here and send a heartfelf thanks from Africa for all you do here. Bought some Primeiro shares for my 2 sons and it is doing wonders for getting them into investing. All the best to you, and Skypilot, Speedy, SN and all the other guys and girls whose thoughts I look forward to.

    Luis

  • Report this Comment On October 06, 2012, at 8:22 AM, daffodilsaregold wrote:

    Ok, I've never commented on Motley Fool before, but yesterday was too amazing to be ignored. When I first looked at my portfolio yesterday, the numbers made no sense, there were just too many digits.

    Thank you Chris Barker. I started buying PPP at $3.66 and kept buying all the way down to $2.54.It's now my 4th largest holding out of 56 positions. My only regret is that it's in a taxable account. Oh well. That's a nice problem to have.

  • Report this Comment On October 06, 2012, at 9:16 AM, XMFSinchiruna wrote:

    Ath002,

    While I am thrilled by the gains that my fellow Fools have enjoyed with PPP, hearing from you that the experience has helped to spark an interest in investing on the part of your sons is truly an inspirational outcome! Thank you for letting me know, and my very best wishes to both you and your sons.

  • Report this Comment On October 06, 2012, at 9:28 AM, JayWemm wrote:

    Sinchi,

    Am so pleased with your research; I was looking for more exposure to gold in my portfolio in the beginning of this year and based on your rec bought a lot of shares at 2.86.Sold 1/3 yesterday at 7.70 after it blew past my limit order at 5.90. Yay!

    Am still holding 2/3. Also is now my largest holding.Looking forward to your ongoing coverage and thoughts.

    John

  • Report this Comment On October 06, 2012, at 9:42 AM, XMFSinchiruna wrote:

    Daffodilsaregold,

    I hope this will be just the first of many conversations you'll take part in here, as the community aspect is a big part of what sets The Motley Fool apart.

    And to you all... Please remember to congratulate yourselves first and foremost! You all maintained conviction in your positions through challenging developments like the resource re-modeling process and stared down some tough-looking weakness in the stock. And you did so all in the midst of a gut-wrenching 15-month correction for the pm sector at large. I think you are each quintessentially Foolish investors, and I am confident of your continued success.

  • Report this Comment On October 06, 2012, at 11:32 AM, SN3165 wrote:

    "You all maintained conviction in your positions through challenging developments..."

    It's always darkest before the dawn. Congrats Sinch, this was well-deserved. Right now at 25 I'm in a position to both pay off my student loans completely, quite a large sum... and I really don't think it would have been possible without your help.

  • Report this Comment On October 06, 2012, at 11:58 AM, XMFSinchiruna wrote:

    SN,

    In addition to Chris Marchese (speedybure), you and Skypilot were both instrumental in my finally taking a long-overdue position in Sandstorm. I initiated core positions in both Sandstorms only a short time ago, and I've already locked in some substantial gains while leaving major chunks in place for the long haul. My thanks to all 3 of you!

  • Report this Comment On October 06, 2012, at 2:22 PM, dcgatlanta wrote:

    Thank you TMF Sinchiruna for sharing your excellent research with this community. PPP is another strong winner for me, joining SLW and GPL as a multibagger. If you visit Atlanta, I'd love to buy you dinner.

  • Report this Comment On October 08, 2012, at 5:33 AM, gaminsky wrote:

    "Nobody ever went broke taking a profit" I learned this hard lesson a few years ago. Although in retrospect, a trailing stop loss would have been the way to go in this instance.

    "Greed is not my friend" is my other one. LOL

    Putting a trailing stop loss in SAND, though (at least on half my position.)

  • Report this Comment On October 08, 2012, at 11:43 PM, skypilot2005 wrote:

    On October 06, 2012, at 1:31 AM, TMFSinchiruna wrote:

    Texasflyfish,

    Keep in mind that no money is truly made until a profit is at least partially booked, or, alternatively, protected by a trailing stop."

    Sinchi,

    I placed one (stop/loss order) this AM and it "hit" today. Profit "locked".

    Big jump in my "funds available to trade" balances. Ha.

    Thanks, for the reminder.

    I'll see if PPP settles at a lower level, yet. I like the company and will purchase, again.

    Thanks, for all you do for us....

    Sky

  • Report this Comment On October 09, 2012, at 9:36 AM, skypilot2005 wrote:

    http://finance.yahoo.com/news/behind-calm-athens-greeces-deb...

    Greece's Debt Nightmare Just Got Worse

    10/9/12

    Sky

  • Report this Comment On October 09, 2012, at 9:50 AM, skypilot2005 wrote:

    http://finance.yahoo.com/news/behind-calm-athens-greeces-deb...

    Greece's Debt Nightmare Just Got Worse

    10/9/12

  • Report this Comment On October 10, 2012, at 5:44 PM, skypilot2005 wrote:

    http://www.marketwatch.com/story/aurico-gold-rallies-after-7...

    Oct. 10, 2012, 8:32 a.m. EDT

    AuRico Gold rallies after $750 mln sale of mine

    http://finance.yahoo.com/news/aurico-gold-selling-ocampo-min...

    "AuRico Gold selling Ocampo mine, Orion stake

    Aurico Gold selling Ocampo mine, adjacent projects and Orion stake for $750 million"

    +20%, today !

    Sky

    Loooong AUQ. Thanks to Sinchi.

  • Report this Comment On October 10, 2012, at 10:35 PM, skypilot2005 wrote:

    http://finance.yahoo.com/news/brigus-gold-reports-q3-product...

    CORRECTING and REPLACING Brigus Gold Reports Q3 Production and Goldstream Repurchase

    10/10/12

    Brigus Gold Reports Q3 Production and Goldstream Repurchase

    (NYSE MKT: BRD; TSX: BRD) – Brigus Gold Corp. (“Brigus” or the “Company”) produced 19,526 gold ounces in the third quarter of 2012 – an increase of 7 percent over second quarter production of 18,254 ounces.

    The Company is also pleased to announce that it has secured $30 million in debt financing. $26.4 million of the debt proceeds will be used to repurchase 4 percent of the existing 12 percent goldstream with Sandstorm Gold Ltd. (“Sandstorm”).

    Long BRD

    Sky

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