Gold: Time to BuyNick Hodge wrote about this today, and its almost like he was looking at Ressources Appalaches and the Dufferin Mine when he wrote this.... lean, mean junior making it to production.....
Great stuff.
Gold: Time to Buy By Nick Hodge | Wednesday, January 8th, 2014 Gold and silver have been flat for a month now.
A bottom is seemingly being carved out.
The yellow metal sits at $1,235 as I type. Silver is just below $20.
This is presenting us with deep value to initiate or accumulate positions.
Buy bullion first and foremost. After that, a good place to look is solid junior miners with good properties and management that will rise by multiples once precious metals start heading back up.
The Seeds Have Been Planted (And Continue To Be Planted) For The Next Big Run In Gold Stocks
There's no better cure for low prices than low prices. The great benefit of the collapse in Gold prices this year is that it forced producers (at least most of them) to start to become much more lean in terms of their cost structures. Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their overall operations. Exploration budgets among both producers and juniors have also been cut sharply. In addition, government policies across much of the globe are making it more difficult (sometimes impossible) for mining companies to put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists. Ultimately, all these factors are going to create a supply problem – think about it, where are the next major Gold deposits going to come from? On top of that, grades have fallen significantly just over the past decade.
It doesn't take a rocket scientist to figure out that the next huge bull market in Gold stocks is just around the corner due to demand-supply dynamics, much leaner producers who will suddenly become earnings machines, and a junior market that will be healthier simply because a lot of the "lifestyle" companies sucking money out of investors will simply disappear or get taken over by individuals or groups who are actually competent and serious about building shareholder value. A healthy "cleansing" in the market has been taking place. As this continues, more and more seeds are being planted for an incredible future move in well-managed Gold producers and explorers that could make the dotcom bubble look like a tea party. As for the juniors, focus on the small universe of companies that have the ability to execute both on the ground and in the market. Companies that are strong financially, have superior exploration prospects, competent management and clean share structures.
Bottom line: New gold discoveries are at an all-time low, and the difficult financing market has prevented new capital for exploration. This will set the stage for the next cycle: a rally in prices.
As I said, metal in your hand is always the best option.
But my team has also found a way for you to easily double your metals' profits in the market. Check it out for a chance to get a free Silver Eagle.
Call it like you see it,
Nick Hodge
@nickchodge on Twitter
Nick is the Founder and President of the Outsider Club, and the Investment Director of the thousands-strong stock advisory, Early Advantage. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.
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