The Top 10 Gold Stocks for 2013: Part 2

With so much that I wish to convey about the top five selections among my top 10 gold stocks for 2013, please indulge me while I dive right in. I strongly encourage readers to begin with Part 1 of this series to consider my associated outlook for continued strength in the gold price, and to review my first five selections. I also invite readers to bookmark my article list or follow me on Twitter in order to track my ongoing coverage of these and other standout gold equities throughout the year ahead. With that said, here's wishing every Fool a happy and profitable year of prospecting in the gold patch during 2013.

5. Primero Mining (NYSE: PPP  )
Following a monumental 162% advance since I declared Primero the greatest gold stock in the world some 15 months ago, it stands to reason that the stock would slip back a few spots from its prior position at the top of my list for 2012. But this standout growth story is far from over, and Primero remains a core position in this Fool's stock portfolio. CEO Joe Conway and his team delivered a truly masterful performance during 2012, and now looks to deliver additional growth through the addition of a second gold mine by 2015. Like the looming expansion at San Dimas, the construction of Cerro del Gallo in Mexico's Guanajuato state strikes me as an attractively low-risk venture that will indeed catapult Primero into the next class of budding mid-tier gold producers. Although I certainly don't anticipate another multibagger run for 2013, I see scope for perhaps a 30% advance or better with continued organic resource growth as a key potential catalyst.

4. Eldorado Gold (NYSE: EGO  )
By hiking the ancient silk road -- from its previous foray into China to a new operational focus upon Turkey and Greece -- Eldorado Gold has amassed a peer-leading growth profile that targets a monumental 158% expansion of annual gold production over the next four years. Growing from a larger base this time around, it's reasonable to expect some meaningful challenges along the way for such an aggressive growth trajectory. However, given the undeniable quality of the underlying asset portfolio, paired with an exceptional outlook for continued organic resource growth like the 1.5 million gold ounces added to the Certej project in Romania during 2012, Eldorado presents some of the more exciting upside potential among the larger mid-tier producers. Provided the company continues to execute well as these growth initiatives gather steam in 2013, I see potential for the stock to surpass $18 per share during 2013 for more than a 40% advance.

3. Goldcorp (NYSE: GG  )
Every ship needs an anchor, and for gold investors looking to navigate the admittedly rough seas of the gold mining industry, I can think of no greater anchor than Goldcorp. With the important caveat that some of the company's substantial challenges faced during 2012 could present further selling pressure in early 2013 as forward production guidance takes a bit of a haircut, I agree with Credit Suisse analyst Anita Soni that any such weakness may present a meaningful buying opportunity. I won't go into great detail here, since investors can access my premium research report on Goldcorp for further discussion of the substantial long-term investment opportunity in the shares of this quality producer.

2. Pilot Gold (NASDAQOTH: PLGTF  ) (Ticker "PLG" on the Toronto Stock Exchange, or TSX)
As I stated on my blog at Motley Fool CAPS back in September, I consider Pilot Gold a must-own stock for discerning gold investors. After selling Fronteer Gold with its strategic Long Canyon asset in Nevada to Newmont Mining (NYSE: NEM  ) for $2.3 billion, the pilots have landed on the gold yet again! Pilot Gold launched as a spin-off from that watershed Fronteer transaction, retaining a joint-venture stake with partner Teck Resources (NYSE: TCK  ) in a pair of important gold-bearing properties in Turkey. The Haligaga project already sports an encouraging preliminary economic assessment outlining an after-tax net present value (7% discount rate) of $474 million with an internal rate of return of 20%. Accordingly, Pilot's current market capitalization of $175 million stands at a discount to the estimated value of the company's 40% share of Haligaga alone. Accounting for Pilot's substantial treasury of $43 million, that discount grows deeper still.

But it's the other project in Turkey -- the one with the quirky name -- that's driving the bulk of shareholder value creation at present! The company's 2012 drilling campaign at the TV Tower property -- and in particular at the high-priority Kucukdag (or "KCD") target -- produced truly game-changing results. In one phenomenal intercept released in September, KCD returned a major 137.1-meter interval grading 5.9 grams per tonne gold, 12.6 g/t silver, and 0.53% copper. Providing glorious catalyst potential for 2013, 26 holes from the 2012 campaign are still pending assays, and Pilot is following up with an ambitious plan to drill 25,000 meters at TV Tower in the coming year. An initial resource estimate for the KCD deposit, furthermore, is expected by mid-year.

During the second half of 2013, Pilot intends to conduct a 25,000-meter exploration campaign at the company's 100%-owned, past-producing Kinsley asset in Nevada. Kinsley sits directly on-trend with the Long Canyon project that Pilot's own team first discovered, and possesses "the same stratigraphy, structure and mineralization style as Long Canyon." Initial drill results show promise there as well, placing another important golden nugget in what may be the industry's most exciting investment prospect. I'm looking for a $3 share price for Pilot Gold in 2013, but longer term I believe that legendary gains will likely be enjoyed by those who opt to fly with these proven gold-spotting pilots.

1. Sabina Gold & Silver (NASDAQOTH: SGSVF  ) (Ticker "SBB" on the TSX)
I have called Sabina the best-kept secret in gold, but the time has come for this secret to get out! With a current market capitalization of just $390 million, these shares presently value the entirety of Sabina's non-cash assets at a mind-boggling $261 million. The company's enormous silver royalty alone is worth far more!

Sabina is due 22.5% of the first 190 million ounces of silver produced from XSTRATA's Hackett River polymetallic property, and 12.5% of any silver output thereafter. Using a conservative silver price of $22 per ounce, Sabina makes a convincing case for a $650 million net present value for that silver royalty alone. XSTRATA completed 50,000 meters of exploration drilling at Hackett River during 2012, and has proposed to partner with Sabina to build a seaport and road for their respective properties in Canada's Nunavut province. Because XSTRATA is obligated to produce a bankable feasibility study by about mid-2015, I think we can expect to see some preliminary assessment work to define development scenarios for Hackett River within the near future. Naturally, any explicit indication of pending mine development by XSTRATA could spark a massive catalyst for the shares as a more reasonable valuation for the silver royalty is achieved. Meanwhile, Silver Wheaton's (NYSE: SLW  ) 7.8% equity stake in Sabina reminds silver-savvy Fools not to underestimate the potential value of this fascinating non-core asset.

Remarkably, you could strip away that exciting silver royalty, and I would still be touting the powerful multibagger potential of Sabina Gold & Silver! Sabina's flagship Back River property boasts an uncommonly high average gold grade of 5.6 grams per tonne across an indicated resource of 4.2 million gold ounces, plus another 1.7 million ounces in the inferred category. And you can expect that tally to grow very soon following a major 76,000-meter exploration program during 2012. Sabina CEO Rob Pease recently commented: "This is a highly prospective land package and year over year we continue to extend mineralization to depth and along strike, all the while adding ounces and finding new targets that warrant follow-up." With an array of substantial intercepts -- like one 16.1-meter interval of 51.9 grams per tonne gold that extended the "G2 zone" of Sabina's Umwelt deposit down-plunge -- I view the pending year-end resource update for Back River as another compelling catalyst for a rally in the shares during 2013.

Another major catalyst looming is the project's ongoing pre-feasibility study, which is expected by mid-year 2013. The study will follow-up on a very successful preliminary economic assessment released last May, which outlined robust economics to counteract the project's remote location and frigid climate. Agnico-Eagle Mines (NYSE: AEM  ) has proven willing to brave the cold for gold in Nunavut with the pending construction of a second mining operation in the region, and I consider Back River every bit an equal to Agnico's Meliadine. Sabina's PEA for Back River outlined a mining operation to produce 300,000 ounces of gold per year at an extremely competitive all-in cost of $542 per ounce (based upon a conservative $1,250 gold price). Requiring only $450 million in pre-production capital, Back River boasts an after-tax net present value (5% discount rate) of $650 million with a 25% internal rate of return. Given Sabina's unique potential capacity to fund all pre-production capital expenditures for Back River by monetizing its silver royalty on Hackett River, I find ample cause for a substantial rerate of Sabina's shares to reflect the company's entirely positive prospects for ushering this high-grade gold project into production.

Please stay tuned on New Year's Eve for my annual offering of the top silver stocks for 2013. In the meantime you can hone your understanding of Silver Wheaton by clicking here to access The Motley Fool's premium research report on this legendary silver streamer.



Read/Post Comments (26) | Recommend This Article (44)

Comments from our Foolish Readers

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  • Report this Comment On December 28, 2012, at 4:31 PM, SN3165 wrote:

    I like the list but I think some picks are too conservative. Hope you are not offended, but here's my thoughts...

    While I like Eldorado and Goldcorp I don't think they will provide the best gains and I don't see nearly as much upside in Primero and Pilot in 2013 after both doubled in 2012. (Long term is different, however, as I like both. I sold all my Primero this year but still hold all of my position in Pilot).

    I would have went with Silvercrest and one stock that has failed to deliver yet - Brigus (but they ARE under $200 mill market cap, maybe that's why they were left out?). Feel free to disagree. Reason I like Brigus in 2013 is that they have bought back 4 percent of the gold stream from SAND (and will buy back the remaining two percent soon IMO). This goes straight to the bottom line. Adding to that is the fact that they have reached production levels of at least 20K a year and reduced cash costs to under $800. I haven't given up on them yet, as you can tell! I believe strongly that 2013 is the year they break out. Brigus could also be a top pick for 2014/15 as production from Grey Fox plans to come online.

    Silvercrest is undergoing an unbelievable production expansion which will see them produce about 2.5 mill SEO's in 2013, but in 2014 that jumps to around 5 million (if they deliver).They have 47 mill in cash and are quite profitable right now - 9 months ended, .20 EPS and .33 cash flow/share, with a cash cost around $7 an ounce. Perhaps that should be a pick for next year instead.

    Other stocks I really like for 2013 (that are under the $200 million threshold) include - Wildcat Silver, Corvus Gold, Cardero, Kimber, Dynacor, Petaquilla, etc.

    Thank you for your analysis as always, it is appreciated! And have a great New Year - here's to a much better 2013!

  • Report this Comment On December 28, 2012, at 9:58 PM, dcgatlanta wrote:

    TMFSinchiruna,

    Thanks for sharing your research and predictions. Regarding Sabina, is it four plus years away from receiving any revenue? It seems cash from the silver royalty is a 2016 / 2017 possibility and its own mine development is further into the future. 2013 may not have the catalysts to propel the stock.

    Thanks again for your research.

  • Report this Comment On December 28, 2012, at 10:40 PM, XMFSinchiruna wrote:

    SN,

    As you know, Silvercrest is a silver stock. This was a list of top gold stocks. You just needed to wait for my silver stock list coming out on New Year's Eve. :P

    I agree that Goldcorp is a conservative pick, but it's intentionally so because I aim to offer selections to suit a range of investment styles and goals. I wouldn't dream of building a basket of gold stocks that did not include Goldcorp for both its very limited downside risk and extremely favorable long-term growth profile. The dividends are also very important considerations for many investors, modest though they may be.

    On the other hand, I don't agree that Eldorado Gold is a conservative pick. On the contrary, the story does entail some risk as Eldorado must execute on one of the industry's most aggressive production growth spurts for the pick to really pay off the way I think it could. I am speculating that they will execute well as they have shown themselves capable of doing in the past. With perfect execution, the stock could easily double in 2013, which would be no small feat for a producer of its scale. My $18 price target allows for a hiccup or two, which I think we've all learned the hard way that it's worth working into our expectations. I'll take a 40% gain for my number-four pick any day, particularly when that prospect is paired with relatively limited downside risk.

  • Report this Comment On December 28, 2012, at 10:56 PM, XMFSinchiruna wrote:

    dcgatlanta,

    That's not entirely right. Sabina could potentially monetize that silver stream from the moment XSTRATA indicates its intention to construct a mine at Hackett River.

    Based upon the asset valuations implied by the present market cap, I believe the stock could easily triple or quadruple well before the first ore comes out of the ground at either Back River or at Hackett River.

    If you study the stock performance of explorers/developers that make the transition into production, you'll find that most often the greatest investment gains are booked well in advance of first production. What you really need to supersize such returns is a woefully inadequate market valuation of assets to begin with, and that is precisely what we have here in Sabina.

    I identified several specific catalysts above for 2013 in particular, and I consider them capable of delivering one of the year's elite stock performances.

    Good luck, and Happy New Year!

  • Report this Comment On December 28, 2012, at 10:58 PM, XMFSinchiruna wrote:

    And SN, Happy New Year to you as well! :)

  • Report this Comment On December 29, 2012, at 12:31 PM, skypilot2005 wrote:

    http://www.xstrata.com/media/news/2011/10/04/0800CET/

    http://www.sabinagoldsilver.com/s/Hackett_River.asp

    Hackett River Royalty

    November 2012

    Xstrata Zinc's Hackett River Project

    The high-grade zinc-silver Hackett River Project is located approximately 50km from Sabina's flagship Back River gold project and is envisaged as a 10-20,000 tonne per day open-pit and underground operation with an expected mine life of over 15 years. Sabina holds a significant silver production royalty on Hackett River comprising 22.5% of the first 190 million ounces of silver produced and 12.5% of all the silver produced thereafter. Sabina is pleased to provide the following update on the project.

    Xstrata Zinc's 2012 Hackett River Accomplishments:

    • Completed 51,000 m of drilling.

    • Conducted environmental and Socio-Economic baseline studies -- mostly completed

    • Engineering and pre-feasibility study commenced in September 2012 -- Engaged Hatch Canada Ltd.

    • Conducted preliminary assessment of tailings, waste rock, airstrip and new exploration camp locations.

    Rob Pease, President & CEO of Sabina, added: "We are pleased to see such significant progress at Hackett River which will help create value for Sabina shareholders through continued de-risking of our silver royalty. We look forward to working in close cooperation with Xstrata Zinc and local stakeholders as we endeavour to create long-lasting employment and economic development opportunities together through our efforts at Back River and Hackett River."

    Interesting:

    http://www.sabinagoldsilver.com/s/Directors.asp

    William W. Cummins, B.Sc., CA

    Honorary Chairman

    Mr. Cummins obtained the Bachelor of Science degree in 1955 and Chartered Accountant designation in 1959. He worked with a major CA firm until 1969 specializing in mining audits, securities and taxation matters. In 1969, he joined the Northgate group -- base metal miners in Ireland -- where he was a Director and managed the initial financing of the Tara mine -- Europe's largest ever zinc/lead deposit. In 1972 Mr. Cummins personally acquired control of Sabina Industries Limited, now Sabina Gold & Silver Corp. and has managed and directed Sabina ever since. He has also been a director and officer of several other mining and exploration companies over the years, currently sitting on the boards of Coniagas in Toronto and Glencar Mining in Ireland and Mali.

    ________________________________________

    http://www.bcbusinessonline.ca/rob-pease-sabina-gold-silver-...

    http://www.bcbusinessonline.ca/rob-pease-sabina-gold-silver-...

    The new president and CEO of Sabina Gold & Silver Corp. talks about a major project for B.C.'s economy and the myriad challenges of working in mining.

    December 19, 2012

    Sabina Reports Important Permitting Milestone at Back River

    http://www.sabinagoldsilver.com/i/pdf/News-release-12-23.pdf

    http://www.sabinagoldsilver.com/s/NewsReleases.asp?ReportID=...

    November 27, 2012

    Sabina provides Update on Nunavut Projects

    http://www.sabinagoldsilver.com/s/NewsReleases.asp?ReportID=...

    November 15, 2012

    Sabina reports on a successful 2012 program at Back River Project, Nunavu

    http://www.sabinagoldsilver.com/s/NewsReleases.asp?ReportID=...

    11/9/12

    http://www.sabinagoldsilver.com/i/pdf/2012-11_SBBP.pdf

    November 2012

    November 09, 2012

    Sabina Gold & Silver Announces Q3 2012 Financial Results

    http://www.sabinagoldsilver.com/s/NewsReleases.asp?ReportID=...

    Sky

    Long Sabina

  • Report this Comment On December 29, 2012, at 10:55 PM, XMFSinchiruna wrote:

    Skypilot,

    Thank you so much for posting all that great information on Sabina. And thank you, my friend, for another year of service to your community of fellow investors with your selfless efforts to facilitate due diligence. I hope your fellow Fools thank you often. Happy New Year!

  • Report this Comment On December 29, 2012, at 11:25 PM, zman4money wrote:

    I have a question that you would probably know TMF Sinchiruna. What is the difference between buying Sabina from the pink sheets, or the toronto exchange? Which do you prefer? Thanks, I love reading these articles of yours

  • Report this Comment On December 30, 2012, at 1:56 PM, XMFSinchiruna wrote:

    zman4money,

    The Toronto-listed shares are always preferable to an associated OTC listing. Many U.S. investors lack access to the Toronto shares through their discount brokerages, and so turn to the OTC securities as their sole option. The most common drawback to the OTC is that the securities trade with substantially less liquidity than the primary listing.

  • Report this Comment On December 30, 2012, at 9:47 PM, zman4money wrote:

    Ok thanks a lot, I noticed a price difference, but that is with all companies traded on multiple exchanges. Thanks for the response

  • Report this Comment On December 31, 2012, at 6:30 AM, skypilot2005 wrote:

    On December 29, 2012, at 10:55 PM, TMFSinchiruna wrote:

    Skypilot,

    Thank you so much for posting all that great information on Sabina. And thank you, my friend, for another year of service to your community of fellow investors with your selfless efforts to facilitate due diligence. I hope your fellow Fools thank you often. Happy New Year!

    Sinchi,

    Thanks. Happy New Year to you.

    I encourage my fellow Fools to do the same.

    The Web has a wealth of information. Find relevant information and post it.

    Collectively, we can make a difference performing D. D. and validating investment’ theses.

    For me, it’s all about making money.

    I am still deploying funds from my PPP “gain” courtesy of your well thought out writings on the company.

    #4 lost the coin flip and is my designated driver tonight so,here is to us all helping each other make some serious money in 2013.

    Sky

    2013 Official Web Link Assistant to Sinchi

    BTW I still like PPP. It’s just not on the top of my buy list.

  • Report this Comment On December 31, 2012, at 7:13 AM, skypilot2005 wrote:

    Even “The Establishment”…….

    http://finance.yahoo.com/news/heres-pimcos-bill-gross-sees-0...

    What Pimco's Bill Gross Sees Going Up in 2013

    Bill Gross, the so-called bond king who oversees nearly $2 trillion at his firm Pimco, predicts unemployment may actually reverse course and rise next year. This bleak economic outlook will make for weak fixed income and stock returns and cause gold to go higher, Gross said.

    The simple proclamation came as many do these days, via Twitter, on Sunday morning.

    "2013 Fearless Forecasts: 1) Stocks & bonds return less than 5%. 2)Unemployment stays at 7.5% or higher 3) Gold goes up...," Gross wrote...

    Sky

  • Report this Comment On December 31, 2012, at 10:49 AM, pet123456 wrote:

    Chris Barker, your articles are no longer showing up via this RSS feed address where I used to get your latest articles. Last article to show up was December 11th. The RSS Feed address that isn't working is below,

    http://www.fool.com/feeds/authorheadlines.aspx?author=1632&a......

  • Report this Comment On December 31, 2012, at 10:54 AM, pet123456 wrote:

    Correction. The last article to show via RSS feed that is broken was,

    Keeping Them Honest: How I Lost Money with Gold in 2012

    ‎Friday, ‎December ‎21, ‎2012, ‏‎2:37:36 PM | Christopher Barker, The Motley Fool

  • Report this Comment On December 31, 2012, at 3:28 PM, XMFSinchiruna wrote:

    Please also find my Top 5 Silver Stocks for 2013:

    http://www.fool.com/investing/general/2012/12/31/the-top-5-s...

    Happy New year!

  • Report this Comment On January 01, 2013, at 12:52 AM, botfeeder wrote:

    A thumbs up for Sabina.

    My IRA plummeted from a high of 1.6 mil to about 400k in Nov 2008 during the crash.

    Sabina more than any other stock allowed me to restore my retirement, as I was buying a lot in early 2009 and got lots of it at 37 cents per share.

    Got the account back to 1.4 mil although I have since bought a house with part of it.

    There are a lot of stocks you could have made 100s of % of gains on if you bought in late 2008 or early 2009 but Sabina was among the best.

    Since the rebound of 2009/2010 precious metals equities have not done well. Since I am retired and am just lucky to have had my financial future rescued from my incredible recklessness of 2008, I am way more conservative now and am over 50% cash and have far less shares of Sabina than in 2009.

    But long term I do believe you want some good hedges against global money printing. You could buy gold bullion but I believe in a gold bull market a deep value precious metals stock like Sabina has a good prospect of going up a multiple of 3x-5x of what the underlying metals do percentage wise.

    So you can put a substantial chunk of your money in stocks like Sabina and try to hit the jackpot, or you can put 20% or so of your money in stocks like Sabina like I do and figure you have largely hedged your entire savings against monetary devaluation while only putting a fraction of your savings at risk. If you're retired like I am the latter is probably a better strategy. I don't need to get rich, I have a nice house and just need my money to last till I die. If I do make gains, modest gains are fine, they would be enough to pay for a little remodeling.

    By the way, anyone going to the Vancouver conf, see you there! My #1 question for Sabina is what is your strategy on ramping down exploration spending as you find less and less low-hanging fruit from your drill holes. 2010 and 2011 yielded phenomenal results, I believe it dropped off a good bit in 2012 and I wamt to make sure they put business savvy ahead of exploration exuberance.

  • Report this Comment On January 01, 2013, at 9:23 AM, Seamaster7734 wrote:

    Chris,

    I wonder if you would consider a follow up to last year's choices, a sort of "where are they now" article.

    As examples, how did ANV, BRD, PPP lose their status? Poor execution, better deals out there, loss of miner du jour status?

    Always enjoy your articles, so any thoughts you can provide would be appreciated.

  • Report this Comment On January 02, 2013, at 10:30 AM, XMFSinchiruna wrote:

    Seamaster7734,

    That's a great idea. :)

    But I certainly wouldn't wish to imply that PPP has somehow lost some status. It's slide down the list from the number-one slot last year represents a fully rational adaptation to the enormous rally the stock enjoyed as the major elements of my situational investment thesis played out.

    The one operator that really lost "status" for me during 2012 was AuRico Gold. Those guys let me down in a very big way.

  • Report this Comment On January 03, 2013, at 10:50 AM, XMFSinchiruna wrote:

    botfeeder,

    I may be able to offer a slightly different perspective regarding Sabina's trailing exploration results and forward outlook.

    As you progress a property forward through successive phases of resource estimation and economic assessment, the independent consulting firms conducting those assessments will increasingly set paramaters for you regarding additional exploration work required to achieve the best outcome. Most often, that leads to a major emphasis upon infill drilling to achieve an enhanced degree of certainty in the estimation of those resources on which that next assessment will be based.

    As a result, emphasis upon the targeting of new discoveries will very often take a back seat to infill drilling while these reports are pending. Among investors, that shift can often create the mistaken impression that the rate of new discoveries and therefore the remaining expansion potential of the property has diminished.

    Back River is a huge project, and Sabina retains a significant array of high-priority exploration targets that -- using the same geological "tool box" that drove the company's phenomenal track record of prior discovery -- are bound to yield additional "low-hanging fruit" in terms of fresh new discoveries going forward.

    And in any event, even as preparations for the upcoming pre-feasibility study will have constrained the emphasis upon new discovery, Sabina did expand its resource base in 2012 with some quite-successful efforts to expand existing mineralized zones both laterally (along strike) and also at depth. This new near-surface discovery between Umwelt and Llama is a beautiful example:

    http://www.sabinagoldsilver.com/s/NewsReleases.asp?ReportID=...

    But you are absolutely correct that Sabina's exploration spending will need to materially ramp-down from recent levels as the potential construction phase draws nearer. And I'm glad you intend to seek out company representatives in Vancouver to pose those questions, because it's important for investors to stay engaged in that way.

  • Report this Comment On January 04, 2013, at 9:12 AM, Noneleft01 wrote:

    I am wondering why CGR has dropped off the list this year? It was highly recommended on here, but then the price began a brutal slide from which it has never recovered, and everything went quiet.

    CGR is now about half the price compared to when it was being recommended here, which would imply, in the absence of any other information, that it is an even bigger steal now than it was before? If not, what has changed?

    Not only is CGR much cheaper than it was then, but it has also dropped proportionally more than the general price weakness among other PM miners. Would appreciate your thoughts on this, and whether you are still invested / adding ?

  • Report this Comment On January 06, 2013, at 12:26 PM, maniladad wrote:

    Hi Chris, I'm a fairly new investor and absolutely new investor in precious metals. Two really basic questions first: What does PEA stand for? What is a streaming business model? Investopedia is no help on either. I gather that streaming is something like a company buying shares in another company that is doing the exploration in return for a share of the mineral that is later produced but the whole concept is vague for me. PEA is a complete mystery.

    Re SBB.OT/SGSVF, the company website shows some photos of the terrain. Looks like it would be a massive mudbath in warm months and bitter cold in winter. There are references to 'potential' all weather roads and to a 'potential' deep water port but transporting the ore and the finished product looks like a formidable challenge. I'm sure you're aware of this; would you comment, please?

    Finally (for now), you're probably aware that TMF is promoting Rubicon RBY/RMX.OT as a come-on for Stock Advisor. At the moment it looks like a slightly better buy on the basis of recently

  • Report this Comment On January 06, 2013, at 12:42 PM, maniladad wrote:

    (sorry; screwed up keyboard) recent price movement. Care to comment on Rubicon or on playing price games? Or on the price increases of the past week or so since your article?

    I saw one stock that looked like it was an IPO in one year and in the next suddenly plummeted from 50 to near 0. Can't find it now but might have been RBY. Is this the kind of stock movement that I'm going to be exposed to in precious metals?

    Oh, a comment: I suspect the reason that prices are depressed is because most people don't look ahead beyond the next quarter or back beyond the last.

    Thanks

    D

  • Report this Comment On January 07, 2013, at 7:22 PM, PeterRabit wrote:

    maniladad asked: "What is a streaming business model? "

    Silver Wheaton (SLW) is the premier example of this model. You have the general idea. SLW loans money to a company developing mines (generally silver mines) in return for being able to buy a portion of the production at a low price (often around $5 per ounce).

    Sandstorm Gold is now using the same model for gold mines.

  • Report this Comment On January 08, 2013, at 12:09 PM, maniladad wrote:

    PeterRabit: Thank you for a very helpful explanation. Like a lot of people I am looking at gold primarily as a safe harbor from rampant inflation. Exploration and development companies seem to carry a high risk and that doesn't seem congruent with a goal of safety. If someone as knowledgeable as Sinchiruna/Christopher Barker can have a bad year, a neophyte like myself is 'way out of his league. A streaming company seems a good way to use someone else's expertise; maybe not a lot of home runs but enough hits to run up a good score.

    I did encounter one bit of information that caught my attention: The ratio of the price of mining stocks to the price of gold is at a 10-year low. So while I'll be looking very carefully at the two stocks you mentioned, I did put in a couple of low-ball offers, for Claude Resources and for SGSVF. I was a little disappointed to realize that I can't use my IRA funds to buy on the Toronto Stock Exchange. I was hoping to have a foreign currency denomination as an additional hedge against devaluation of the US dollar. Can't have everything, I guess. Thanks again for the response.

    D

  • Report this Comment On January 08, 2013, at 12:33 PM, maniladad wrote:

    PS I see that I got CGR at 0.53. It went below 0.52 briefly but I'm satisfied. Now it's time to wait for better days. Unfortunately Sabina is going in the wrong direction for a low-ball offer. Can't have everything.

  • Report this Comment On January 08, 2013, at 9:33 PM, skypilot2005 wrote:

    http://www.snl.com/Cache/1500045727.PDF?D=&O=PDF&IID...

    Winter Presentation

    http://www.snl.com/irweblinkx/presentations.aspx?iid=4288058

    http://www.brigusgold.com/

    Brigus Gold Hits 2012 Production Target

    Halifax, Nova Scotia; January 7, 2013 (NYSE MKT: BRD; TSX: BRD) – Brigus Gold Corp. (“Brigus” or the “Company”) is pleased to announce record production levels of 22,672 gold ounces in the fourth quarter of 2012. The Company finished the year within the guidance set on February 21, 2012 of 77,000 – 85,000 ounces with a total of 77,374 ounces.

    “We finished the year in a very strong position and are well poised for growth heading into the new year,” said Wade Dawe, Brigus’ Chairman and Chief Executive Officer. “Gold production increased each quarter in 2012, a trend that will continue into 2013 as we reach annual steady state production levels.”

    http://www.snl.com/Cache/1500045697.PDF?D=&O=PDF&IID...

    Sky

    Long BRD

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