PINL:VLTAF - Post by User
Comment by
mrcashflowon Apr 27, 2012 11:21am
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Post# 19843956
RE: Consolidation of sector....
RE: Consolidation of sector.... Well one would think with TRR (Trelawney) being swallowed up there will be a few more acquisitions along the way..Gold producers are flush with cash right now, despite the fact the whole sector has under performed the market over the past few years. Agnico Eagle (T.AEM) just released their earnings this morning, The higher net income and cash provided by operating activities in 2012 was primarily due to a 20% higher gold price, compared to the first quarter of 2011. One would just have to take a glance at their chart to realize that something is definitely wrong with the picture here. It appears that gold stocks are being swapped for ETF's over the past few years, but given the valuations of "senior producers" I expect this trend to be reversed very soon...Gold producers are just too cheap right now, given their cash flows and reduced share prices.
As the global economy continues to shift away from the U.S dollar, I expect the price of gold to continue to rise..Eventually the "junior mining" and "explorers" will benefit with the money flows into the sector. As the money flow increases, expect a feeding frenzy in the junior mining space, as seniors gobble up ounces at a reduced cost in order to replace reserves. Volta will certainly be on any seniors list...Under .90 cents Volta is surely a target.
I still feel secure with my investment in this sector, and will not be unloading my shares of Volta anytime soon.
Have a great weekend
Mrcashflow