Why would one buy gold companies Most investors who buy gold miners are expecting the price of physical to rise for a variety of reasons. In the past two years most gold miners have been in a sideways pattern as the currency issues around the world are being exposed. Many countries are in a deficit position and will not be able to pay off their debts. Currently we have the major two currencies starting to struggle. The US dollar is currently looking ugly but is the least ugly of many.
When you buy a miner you are buying assets in the ground. In the case of SMF they own a gold district. They do not need to borrow any additional funds for expansion. They are adding to reserves and resouces with every successful drill result. Management has been moving slow but progress is taking place.
The company has issued its first cash dividend which I would have prefered in physical gold personally. But this is a start to keep or lower market manipulation of its share price.
Yesterday was a classic day of market manipulation. On neutral news the shares were taken down 12 percent. Also the shares are trading x dividend. Since these shares have been in manipulation since 14 dollars why do you think it would be any different in the short term.
As physical moves higher this will be driving force for profits in the shorter term which will provide the time needed for expansion. Remember managements goal is 500,000 oz of production and they have been successful. Buy on weakness and put away this one in my opinion because as the bull market in gold and silver continue this will look like a bargain in the years ahead. I offer my opinion only please do your own DD.