The Gold majors *(let alone the small fries), remind me of my biggest score ever, U.S. steel, which was hated and despised, left for dead. Goldman sachs assigned a biotech korean analysist to track it and she issued a sell recommendation when it was 21, driving it for a couple days to below 19. I couldn't believe it....18 months later it was 52. It has now been bought out by a japanes company for almost 49 bucks, but the higher offer, from steelmaker Cleveland Cliffs is still on the table.
Looks at irrational price movements as an opportunity to simply load up and wait. NEM for instance, make well over 400 million in cash for every 100 dollars increase in the gold price, and it is also ramping production to add almost 400 million more ounces per annum very soon. I expect in 2 to 3 years NEM to be producing 8 million or so gold ounces (let alone massive copper and even silver). The stock like all the majors is wildly undervalued, as U.S steel was for 3 to 5 years.....
We are looking at a case of the market simply disbelieving in gold mining, despite the rise in the price, its certainty of moving much much higher in the next several years, all of that high priced gold falling to the bottom line at NEM and others. Pure profit, ..the divi is now almost 5 percent. When Gold is at 3000 POG, which is a certainty, ...NEM will be 150 bucks and kicking out a 6.5 percent divi and the generalist funds will be believers and buying like mad hatters................Just like U.S. steel that they despised but then, the profits simply overwhelmed Wall street and forced them to believe and buy. NEM is at the very bottom of an incredible price quadruple and so are some of the others. It is all about massive production ounces and leverage, with basically fixed costs, to a commodity that must skyrocket and will.
