Buying high leverage in a gold bull market, you do not want to buy gold miners that has been producing. The miners that kept producing during the gold bear market supplemented their cash flow by selling gold forward at prices much lower than now, and as a result are carrying "derivatives bombs" (read huge losses), on their books.
Small miners such as CUSIF.ob, VGZ and BENGB.ob all mothablled production when gold prices dropped, have little to no debt, and have huge gold ore in the ground per market cap dollar, thus, as gold stablizes to rises here, when they re-open their mines, share prices will skyrocket.....10-30X from here is very possible.
When I was a NYC firm trader in the 80's/90's I positioned clients in a company called Global Marine at $.60, because it had great assets to stock price. As I rememeber a few years later it was taken out in the $20's. Same effect with these golds.
BENGB.ob is the one I most favor. A crude analysis of their reports shows for everey $4 market cap, there is an ounce of gold and 26 pounds of copper, just in the KingKIng range. Big cap, big name golds like ABX trade as high as 25X that.
"Posted by: willcan
In reply to: Bernard_Barouk who wrote msg# 67587 Date:1/24/2003 8:24:54 PM
Post #of 68974
BB, Do they have enough cash to reopen/restart? I don't get it..
>>VGZ - Only American miner that is debt free and ready to rock and role with big gold ore ranges to go through.
For the nine months ended
9/30/02, the company reports no revenues vs. $817 thousand prior. Net loss according
to U.S. GAAP totalled $4.1 million, up from $1.2 million. Revenues reflect the stoppage
of gold production. Higher loss also suffered from unfavorable U.S. GAAP adjustments
Posted by: Bernard_Barouk
In reply to: ItsAllCyclical who wrote msg# 67565 Date:1/23/2003 10:58:43 AM
Post #of 68974
Gold stocks will roar as we breach 372 and move to 415. Gold stocks in general have lagged, but some of the smaller mines have been totally ignored.
CUSIF.ob - big ore, mine in place, all waiting for is assurance $350 is a new bottom.
BENGB.ob - Peso collapse has made this potentially the lowest price copper and gold producers in the world.
VGZ - Only American miner that is debt free and ready to rock and role with big gold ore ranges to go through.
What do they all have in common? They were mothballed when gold hit the 200's.
These miners will creep up to be 4-8X in the next 6 months to a year waiting for mine opening announcements, at which time they will sharply correct.
They won't be laggards long with today's action carrying forward."
