I was watching BNN (the business news network), and I saw the commodities report which features up and coming junior miners in the gold, silver and copper mining sectors. One of the budding superstars that caught my eye was a junior Canadian explorer and now producer of gold. This little fireball is called New Dawn Mining (ND.TO on the TSX), and their main mining operations takes place in their newly opened Turk mine in Zimbabwe.
Since they opened the mine early in March this year, New Dawn has been steadily increasing production of gold bars month over month. And since March '09, their stock price has soared from a measly 5 cents to $1.45 this November '09. So if you bought $1000 worth of ND.TO in March, you would've made about $28,000 in 7 months. Not bad, eh?
But, there's even better news to keep hanging on to this stock. First, New Dawn has no debt, and current production is profitable after all production costs are taken into account. Second, the price of gold will continue to soar due to ideal conditions that will sustain the gold bull run for the next several years. Third, New Dawn is consistently upgrading it's production goals month over month and are exceeding those production goals, month over month. Last, they are also exploring the surrounding region and have found more veins. I'm looking for New Dawn's stock price to hover around $4.50 per share around mid-summer of 2010.
Sunday, November 22, 2009
Thursday, November 19, 2009
Gold Fever!
It's been a while since I blogged in, but what a time it was for gold. Last time I wrote here, gold futures had just broken $920 per troy ounce. Now, five months later, it's nearing $1150 per troy ounce.
So why the gold fever?
It's simple actually, and its a culmination of several factors working together to brew a perfect storm that will propel and sustain the gold bull forward for years to come.
The first factor is the lack of strength in the US dollar. This recently has been caused by the record low interest rates put forth by the Fed. In order to help stimulate consumer spending and bank lending, the banks were forced to lower their rates to historical lows.
Another factor in weakening the US dollar is the massive infusion of printed paper by the US Mint in order to fund the $700 billion bailout and $700 billion stimulus package that was used to save the financial system of the United States. This stampede of newly printed bills devalued the dollar.
In addition, the devaluation of the US dollar coupled with the low rates will eventually spike up a hyper-inflation scenario in the near and long term future. Because the US dollar is less in value, it will take more of it to buy stuff. Gold has always been the hedge against inflation. Hence, its value will climb even further as long as inflation marches on.
The next factor is demand. Because of the factors I've already mentioned, investors are jumping into gold for both investment profits and insurance. Even entire countries are joining into the fray. India recently purchased 200 tonnes of gold bullion from the IMF. So when countries are buying in bulk, you know demand is hot!
The last factor is supply. Recently, Barrick Gold, the world largest gold producer, announced that it is producing less gold year over year. As well, they mentioned that it is increasingly difficult finding rich ore concentrations. Junior explorers are finding more and more eroding grades of gold. Supply is dwindling.
Couple these two factors of high demand and low supply, and you got a case of high gold prices! Couple that with the rest of the factors, then you've got a gold bull running for at least another 3 to 5 years, and I predict the price of gold when all is said and done, will top out at around $3000 per ounce.
Sounds unrealistic? Hey, I didn't expect it to go from $900 to $1150 in just a few months. The impossible now seems possible.
My advice is to buy gold early when you can. The rocket is just about to take off.
So why the gold fever?
It's simple actually, and its a culmination of several factors working together to brew a perfect storm that will propel and sustain the gold bull forward for years to come.
The first factor is the lack of strength in the US dollar. This recently has been caused by the record low interest rates put forth by the Fed. In order to help stimulate consumer spending and bank lending, the banks were forced to lower their rates to historical lows.
Another factor in weakening the US dollar is the massive infusion of printed paper by the US Mint in order to fund the $700 billion bailout and $700 billion stimulus package that was used to save the financial system of the United States. This stampede of newly printed bills devalued the dollar.
In addition, the devaluation of the US dollar coupled with the low rates will eventually spike up a hyper-inflation scenario in the near and long term future. Because the US dollar is less in value, it will take more of it to buy stuff. Gold has always been the hedge against inflation. Hence, its value will climb even further as long as inflation marches on.
The next factor is demand. Because of the factors I've already mentioned, investors are jumping into gold for both investment profits and insurance. Even entire countries are joining into the fray. India recently purchased 200 tonnes of gold bullion from the IMF. So when countries are buying in bulk, you know demand is hot!
The last factor is supply. Recently, Barrick Gold, the world largest gold producer, announced that it is producing less gold year over year. As well, they mentioned that it is increasingly difficult finding rich ore concentrations. Junior explorers are finding more and more eroding grades of gold. Supply is dwindling.
Couple these two factors of high demand and low supply, and you got a case of high gold prices! Couple that with the rest of the factors, then you've got a gold bull running for at least another 3 to 5 years, and I predict the price of gold when all is said and done, will top out at around $3000 per ounce.
Sounds unrealistic? Hey, I didn't expect it to go from $900 to $1150 in just a few months. The impossible now seems possible.
My advice is to buy gold early when you can. The rocket is just about to take off.
Friday, June 5, 2009
The Spring of Gold is coming
Just this once, I'm going to go against my cardinal rule of ONLY investing in junior gold PRODUCERS... but, just this ONCE, only.
Why?
Because of the potential of making a killing of a lifetime from a small, but seemingly reliable gold explorer.
This company I am talking about is Goldspring, Inc., a junior explorer in the historical Comstock region of Nevada.
I've been looking at this company since the winter of 2008 when the stock price hit a low price of about a penny and a half. What intrigued me about this company wasn't the volume of shares being traded day-to-day, but the SEC filings that they've been submitting. Long story short, they seem like a well-focused company with a goal of one day becoming a junior producer, much like Alexis Minerals in my previous post. As I perused through the filings, I've noticed that Goldspring is lining up all their ducks in a row - the last of these ducks is operation permits and a mining plan. Of course, there are still several hurdles along the way such as equipment purchasing, staff hiring, security, etc. But, given their methodical approach, it looks like they will overcome these hurdles in time. After all, getting into mining production is a difficult and complex process which takes a lot of preparation time and funding. That said, I estimate their production timeframe to be around the mid-year 2010.
I've rolled the dice with this company, going in with a million shares at an average of 1.24 cents per share. I see this more of a long-term, fairly secured lotto ticket with the potential of ridiculous wealth. If they get into production, a run on the share price can hit around 50 cents in a matter of weeks after they start pouring out gold bars.
Why?
Because of the potential of making a killing of a lifetime from a small, but seemingly reliable gold explorer.
This company I am talking about is Goldspring, Inc., a junior explorer in the historical Comstock region of Nevada.
I've been looking at this company since the winter of 2008 when the stock price hit a low price of about a penny and a half. What intrigued me about this company wasn't the volume of shares being traded day-to-day, but the SEC filings that they've been submitting. Long story short, they seem like a well-focused company with a goal of one day becoming a junior producer, much like Alexis Minerals in my previous post. As I perused through the filings, I've noticed that Goldspring is lining up all their ducks in a row - the last of these ducks is operation permits and a mining plan. Of course, there are still several hurdles along the way such as equipment purchasing, staff hiring, security, etc. But, given their methodical approach, it looks like they will overcome these hurdles in time. After all, getting into mining production is a difficult and complex process which takes a lot of preparation time and funding. That said, I estimate their production timeframe to be around the mid-year 2010.
I've rolled the dice with this company, going in with a million shares at an average of 1.24 cents per share. I see this more of a long-term, fairly secured lotto ticket with the potential of ridiculous wealth. If they get into production, a run on the share price can hit around 50 cents in a matter of weeks after they start pouring out gold bars.
Here are a few facts with this company from AOL:
- 564,000 recoverable ounces of Gold in reserves
- additional 870,000 ounces of Gold in resources
- 5.85 million recoverable ounces of Silver in reserves
- additional 12.9 million ounces of Silver in resources
- estimated value of Gold + Silver reserves = $604 million
- all of these ounces of Gold and Silver reserves and resources are on only 5% of Goldspring land
For more information about Goldspring, go to: http://goldspring.us/?act=pages&page_id=9
As you can see from the facts, there is tremendous potential for this company to explode once the start mining. If they plan out the mining production well and execute on their plan, they will make a grand killing, and so will I. If they find similar reserves and resources on the remaining 95% of their land, well let's just say that they will become the next Barrick or Goldcorp.
Saturday, May 30, 2009
The Time is NOW for Junior Gold Diggers!
The perfect storm is upon us, mates! The price of Gold has broken $950/oz and stayed there for a week. The US dollar is weakening, and hyperinflation is right around the corner. Junior gold miners have been crushed last year, and not just because of the global economic downturn. The price of Gold will skyrocket, believe me it will. And, this means that the junior gold producers who have been hammered so badly will benefit the most from the meteoric rise. The perfect storm is here. And already we are seeing evidence in the junior gold mining sector.
I have been following junior gold mining companies since the beginning of last year and found that they've suffered a fair bit over the last few months. But recently, the trend is beginning to change as a rebound is in the works, most particularly in the companies that ARE producing gold bricks, not just drilling and exploring for them. So here's a piece of advice if you want to invest in junior gold companies and make a killing: find the junior gold PRODUCERS, not the explorers.
Canada has a fair share of explorers and only a handful of junior producers. And, my pick would be a small company in Quebec called Alexis Minerals. This little company is a fireball. Recently, it's stock price bottomed out at 24 cents early this year. But ever since they went from being an explorer to becoming a PROFITABLE producer, the stock price shot up to 56 cents today. I got in at 32 cents with a hefty chunk of dough, and I'm keeping this one for a while. Why? Because this company is thinking BIG and have the plans and the means to get there. It's not a matter of funding anymore. They are profitable. It's a matter of time now. They've indicated a huge amount of gold reserves and are continuing to find even more.
Just as recently as this past Wednesday, Alexis Minerals has released a report indicating that they've discovered more EXTRACTABLE gold in their properties.
This is great news, because it shows that they are exploring while they are producing, and that they can pay for exploration costs with their profits. This demonstrates not only a sustainable company, but a company that will grow. It is ripe for the picking, especially at this time.
There are other success stories like Alexis Minerals out there, it's just a matter of finding them. And as the perfect storm hits us, it is the junior gold producers who will become the champions of the gold mining industry.
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