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Gold & Copper etc Miners

MaraMan
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Gold & Copper etc Miners

#346770

Postby MaraMan » October 10th, 2020, 5:08 pm

Given the state of the global economy many people say that gold will continue to do well but there isn't much discussion on these boards about it. I see there have been some posts about junior gold etc miners. I have several small holdings that have done very well of late, but of course they can be volatile. I hold Asiamet, Solgold, Sylvania Platinum, Bluebird Merchant Ventures, Pure Gold Mining, Jangada Mines, plus a larger holding in Barrick. I am seriously looking at Kirkland Lake Gold due to their low production costs and very strong balance sheet.
Does anyone else look at gold miners as a part of their strategy?
MM

spiderbill
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Re: Gold & Copper etc Miners

#346817

Postby spiderbill » October 10th, 2020, 9:18 pm

MaraMan wrote:Does anyone else look at gold miners as a part of their strategy?
MM


I have a decent holding of Pan African (PAF) (first bought in 2011 and added to a various times), which has been doing very well recently after a couple of years of difficulties with South African political uncertainty and a mine that had to be closed. They're now almost debt free, have higher than projected output, a low cost of production now that a tailings plant has come online, and are planning to reinstate some of the dividend this year.

Were as high as 26p+ when gold was above $2000 but have backed off a bit recently to 23.6p. Wishing I'd bought some more when down around 8p a few months back!
I originally bought them for capital growth, then they morphed into a good dividend payer prior to the rough patch. But I also had half an eye on seeing them as a hedge against stock market downturns; and that's certainly held true in this one.

Only familiar with a couple of your mentions, but will take a look when I have a minute.
Not a great time to be buying of course - unless you believe the projections of gold at $3000 :shock:

cheers
Spiderbill

richfool
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Re: Gold & Copper etc Miners

#346825

Postby richfool » October 10th, 2020, 10:05 pm

MaraMan wrote:Does anyone else look at gold miners as a part of their strategy?
MM

Yes, currently there are too many uncertainties and implications of QE in its various forms. So I hold some insurance.

I have a holding of Polymetal, plus a very small holding of Greatland Gold.

Spet0789
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Re: Gold & Copper etc Miners

#346827

Postby Spet0789 » October 10th, 2020, 11:54 pm

I now have about 15% of my portfolio in SPGP (Gold Miners ETF).

I hold this as a levered alternative to physical Gold.

I also have about 3% in Central Asia Metals, one of the best-run and lowest-cost copper/zinc miners in the world.

MaraMan
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Re: Gold & Copper etc Miners

#346970

Postby MaraMan » October 11th, 2020, 5:25 pm

[quote="
Not a great time to be buying of course - unless you believe the projections of gold at $3000 :shock:
cheers
Spiderbill[/quote]

Thanks for the replies Spiderbill Richfool and Spet0789.

Interesting comment above, the way I look at it is if for instance Pure Gold Mining produces gold at a cost of $787 per oz and the current gold price in the markets is $1930 per oz then surely this is very profitable business. I accept that it's profits are dependant on the gold price at the time but I think it won't go down a great deal with the way things are, and it certainly doesn't need to hit $3k per oz to make an investment case now. Pure Gold is about to go into production based on a gold price of $1,500, which should give it an IRR of 51% and a pre-tax free cashflow of $1.3Bn.

I forgot to mention that I too have a holding in Central Asia Minerals, which I bought a while ago on the basis of its divi, hopefully this will be restored soon.

MM

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Re: Gold & Copper etc Miners

#347005

Postby spiderbill » October 11th, 2020, 9:51 pm

MaraMan wrote:Interesting comment above, the way I look at it is if for instance Pure Gold Mining produces gold at a cost of $787 per oz and the current gold price in the markets is $1930 per oz then surely this is very profitable business. I accept that it's profits are dependant on the gold price at the time but I think it won't go down a great deal with the way things are, and it certainly doesn't need to hit $3k per oz to make an investment case now. Pure Gold is about to go into production based on a gold price of $1,500, which should give it an IRR of 51% and a pre-tax free cashflow of $1.3Bn.
MM


Hi MM, yes I was really thinking from the point of view of the hedging aspect when I said that, but should have made it clearer.

If you believe that gold will stay high while the COVID crisis continues to affect the markets, and you are buying on the basis of finding a good solid company with low production costs as an investment, then there is time to enjoy the fruits of that situation.
Some people of course buy on a more temporary basis hoping to make a profit from the share price riding on the gold price by selling at a high and then buying back in when gold falls during a market recovery. For them the current price is probably too high unless they see panic on the horizon. However such trading is not my style and clearly not yours either.

IIRC PAF's cost of production was around $826 so plenty of headroom there and I've no intention of selling any time soon. Haven't had much time to look at Pure Gold in any detail but looks interesting and will take a proper look this week.

cheers
Spiderbill

richfool
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Re: Gold & Copper etc Miners

#347013

Postby richfool » October 11th, 2020, 11:42 pm

spiderbill wrote:
MaraMan wrote:Interesting comment above, the way I look at it is if for instance Pure Gold Mining produces gold at a cost of $787 per oz and the current gold price in the markets is $1930 per oz then surely this is very profitable business. I accept that it's profits are dependant on the gold price at the time but I think it won't go down a great deal with the way things are, and it certainly doesn't need to hit $3k per oz to make an investment case now. Pure Gold is about to go into production based on a gold price of $1,500, which should give it an IRR of 51% and a pre-tax free cashflow of $1.3Bn.
MM


Hi MM, yes I was really thinking from the point of view of the hedging aspect when I said that, but should have made it clearer.

If you believe that gold will stay high while the COVID crisis continues to affect the markets, and you are buying on the basis of finding a good solid company with low production costs as an investment, then there is time to enjoy the fruits of that situation.
Some people of course buy on a more temporary basis hoping to make a profit from the share price riding on the gold price by selling at a high and then buying back in when gold falls during a market recovery. For them the current price is probably too high unless they see panic on the horizon. However such trading is not my style and clearly not yours either.

IIRC PAF's cost of production was around $826 so plenty of headroom there and I've no intention of selling any time soon. Haven't had much time to look at Pure Gold in any detail but looks interesting and will take a proper look this week.

cheers
Spiderbill

There are also the implications of the amount of central banks' funding being poured into the system that may believe will cause gold to reach even greater heights.


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