Options and Centerra.....one way to playBack in Jan 2018, I started to accumulate option contracts on Centerra based on a $6 strike price with an expiry date of Jan 2020. I picked the last batch up in January this year, and at that point held options on 3500 shares, with a Grand total of $5150.00 invested. So I paid a premium on average of $1.47 above the current market price of $6 at Jan 2019.
I posted a few months ago asking about price projections, and what everyone thought. On June 5 the stock hit my target price, and I sold all 35 contracts. For the $5150.00 I invested, i pocketed $3373 in profit after all costs, 65%
It’s not that I thought CG was done, but new contract dates were available that were further out in the future....2021 Jan. To that end, to de risk, but stay in the play, I bought 30 contracts with a $7.00 strike price the same day. I am up a few bucks at this point, 10% based on the bid.......
i expect gold to retrench in price if Trump and Xi shake hands at the G20 this weekend, but don’t think that will happen. As far as CG goes, water licence, KUMPTOR AGREEMENT and advancing projects and perhaps a dividend before too long, should make $7 strike price in Jan of 2021 pretty attainable. If not, I will lose the investment. Anything above $9.30 will be gravy.....seems like a reasonable wager.
For those with a horizon beyond Centerra....I have applied the same strategy with Kirkland Lake, and the results are crazy. I just listened in to a presentation by Mark Utting to a private investment research conference that was a blow away as far as what they are doing. You all might take a look at KL. Seems priced for perfection, but I think it still has 20-30% upside from here regardless of gold s price action......they are mining one OUNCE per ton at Fosterville, (Aus) They now have $400M in cash with no debt. And free cash flow was $93M for the QUARTER.......and they expect higher grades in 3&4 quarter:)))))))))))
Here is a link.....think you have to sign in, ******* this is not KL’s website. The presentation is 40 minutes plus.....it’s worth the listen
https://wsw.com/webcast/vir18/
GLTA
MC