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XMFSinchiruna (27.12)

Holy Buying Spree, Batman!

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January 20, 2011 – Comments (16) | RELATED TICKERS: GG , AUY , CDE

That's about all I can say about that. Sinchi was a busy buyer on the pink sheets today.

Here's one I can discuss because I have not purchased shares this week: Primero Mining.

Have you Fools been tracking the share value on this thing, even after the company laid out its hugely bullish 2011 production targets and exploration program? I mean, I was excited by the value proposition when I first wrote about the transaction last year when I had the $5 to $5.50 IPO target in mind. But at a dollar cheaper, the opportunity there is phenomenal. Volume on the pink sheet (MNOCF.PK) remains miniscule, so liquidity is a legitimate concern, but I expect the current lack of attention the company receives to be a waning phenomenon as they deliver on plans for San Dimas.

Those of you fortunate enough to live or trade in Canada, I recommend Primero ("P") with both thumbs up and my big toes to boot. Those like me forced to utilize the pink sheets, I recommend some caution on both the illiquidity of the security and the underlying uncertainties surrounding these unsponsored proxies in general. With that said, I want to own this company before they decide to offer a U.S.-exchange listing.

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Here is the latest from Alf Fields, whose big-picture chart work on gold is second to none:

He appears quite confident that we're more likely to shoot higher than continue lower. [Go to the link to see the charts that accompany his discussion].  I don't really care either way ... I'm just going about my gradually scaled-up process of buying into weakness.

With a somewhat less bullish near-term outlook, here's the latest from Trader Dan:

On the weekly chart, gold is forming what can be viewed as a potential rounded top formation with support evident near the $1320 level. That is why this level is important for the metal to hold to prevent a deeper setback towards $1285 – $1280. It will take a closing push past $1370 to now turn the tide in favor of the bulls with $1380 to uncover buy stops from fresh shorts.

Silver’s breach of $28, a critical chart support level, casts a negative pall over that market. It had been uncovering some decent buying support near the 50 day moving average but that simply evaporated in the general rout among the metals today. Tightness in the physical market is apparently no match for the paper market. Used to be that in the childhood game of rock, paper, scissors, that paper covered rock so I suppose the same applies with the Comex paper market. It now needs to hold $27 or it will drop to $26.40 or so with the potential for $25 in the cards should it fail to stabilize near that level.

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While I have you here, let me offer up a smattering of my most recent articles for your reading pleasure.

Miners on the Move: Northern Dynasty Minerals

This Global Supertrend is Your Good Friend

POSCO Sees Everything Growing Except Profits

Cliffs Dives Deep into Iron Ore for Asia

Taseko's Back Alley to Prosperity

Gammon's Jammin' Once More

HudBay Minerals Flies South for the Winter

Don't Skip the Scrimpers of Scrap

The Greatest Gamble in Stocks

And for anyone who hasn't done so already, please be sure to bookmark my automated articles list for the easiest access to all of my recent work.

 

16 Comments – Post Your Own

#1) On January 20, 2011 at 4:15 PM, TMFUltraLong (99.95) wrote:

Time for those silver and gold bear plays in the CAPS portfolio to shine ;-p

TMFUltraLong

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#2) On January 20, 2011 at 4:21 PM, XMFSinchiruna (27.12) wrote:

TMFUltraLong

Be sure to lock 'em in while they're green. :) If you do, you will have managed to succeed at the most dangerous game in all of stockdom.

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#3) On January 20, 2011 at 4:50 PM, djshagggyd (72.54) wrote:

Christopher-

I'm always excited to read your thoughts about Primero.

I'm keepin my fingers crossed about the US listing... I'll feel a lot better about this investment if/when that happens. The lack of volume and pink-sheet status of MNOCF still concerns me... but it seems like everything is going to be okay.

I have to admit part of me wishes I would have invested in TC, SLW, or GRS instead. I recently even considered trading my shares of MNOCF for one of the three (this was back when I was still at a humble profit on MNOCF). But with the declining price-action in recent months, I'm now at a 20% loss on Primero's pinksheet... so I'd best sit tight. 

Thanks again for all the great write-ups. It's my goal over the next few months to gain a better understanding of the mining industry... so I'm sure I'll be reading LOTS of your articles in the coming months. 

~justin 

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#4) On January 20, 2011 at 5:49 PM, kdakota630 (29.76) wrote:

Thanks for another heads-up on a great (Canadian) stock.  I'm going to look into this one a bit more but in the meantime, please keep up the great work!

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#5) On January 20, 2011 at 6:43 PM, catoismymotor (< 20) wrote:

I've been selling and buying as well. Two weeks ago I sold 40% of my stake in SLW. It made me sad to do so but I thought it was the best thing to do. The remaining shares are safe and sound in my IRA for the long haul.

Since Thanksgiving I had been researching a handful of companies that I thought would be a energetic place to invest in the new year. I decided on two in which to invest my SLW dough: NXG and GRS. NXG I found on my own. I kept bumping into GRS just outside my sceens, continuously confronted with written praises of it by some guy named Chris I happen to respect. I decided to poor about twenty hours into DD over GRS and became convinced of its virtues. I decided to crack my SLW money evenly between the two and now call myself the proud owner of these overlooked miners. 

Sometimes you need to feed the Green-Eyed Monster, but be sure it is with high quality kibble.

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#6) On January 20, 2011 at 7:53 PM, Bays (29.97) wrote:

djshagggyd

Don't lose faith because you're down 20%, I had bought TCK for around $5.50, and it reached a low of around $3.50 (CAD).  As you know it, this one became my largest winner of all time, but I was down quite a bit before it rallied.

Now I don't know the story on P.to, but knowing Sinch, I'm sure it's worth a lot more than what it's trading for. Just be patient, and let the share price catch up to the fundamentals. 

GL

 

 

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#7) On January 20, 2011 at 10:17 PM, magnetpal (< 20) wrote:

Hey Sinch, I am sure you might have known this. But just wanted to mention.

If we have Interactive Brokers account, we can buy stocks in canadian market from USA. Recently I opened an account in IB and started buying canadian shares directly instead of pink sheets.

Infact, we can trade in as many global markets as we want.

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#8) On January 20, 2011 at 10:43 PM, catoismymotor (< 20) wrote:

Re: #5

Poor = Pour

Yeesh!

 

Sinchy/Grand Poobah/Chris,

Thanks as always for your input with all things PM.  Your offerings are always 24k.

Cato

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#9) On January 20, 2011 at 11:21 PM, magnetpal (< 20) wrote:

It seems on the other thread "http://caps.fool.com/Blogs/alert-primero-mining-to/428246", fools tried to find out which broker offers TSX access. Seems many bought pink sheet MNOCF.

I went in my interactive brokers and personally checked whether "P" is available. Its there! So the search for the broker who offers TSX is over!

Seems commissions are also very competitive. Definitely better than scottrade or etrade. Only problem with IB is: they charge for market data subscriptions which is offered free in many other brokers. They also charge 1$ if we transfer money out from IB to our bank. It was very complex system to understand:). It took two weeks to get familiar with the system and customer care was not that friendly to help me out.

 Neverthless,I am happy so far with IB offerring somany features. I saw commissions were less till now what I bought. I can keep my dollars in CAD instead of USD to keep preserving money value.

 

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#10) On January 21, 2011 at 9:17 AM, XMFSinchiruna (27.12) wrote:

magnetpal

I looked into Interactive Global for that very reason. It didn't pass my screen for undue risk exposure  The company is structured around leveraged debt (i.e. it's boastful offering of easy margin). I feel better about the risk of unsponsored ADR pink sheets than I do staying power if IB. That's just my opinion. I don't aim to make anyone uncomfortable with their brokerage, but I just wanted to share my own process.

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#11) On January 21, 2011 at 9:27 AM, XMFSinchiruna (27.12) wrote:

djshagggyd

Echoing Bays' comments above, I wouldn't sweat a 20% decline in your primero stake. Volatility of that nature goes with the territory in this sector. As a reminder, I watched my entire portfolio of pm holdings deteriorate by nearly 70% during the 2008 financial crisis into late 2009. I never sold a single position into that collapse, because I remained 100% certain that the gold and silver bull market had nowhere near finished running its course. I still feel the same, and so no correction of any scale will shake me from my positions. My only regret from that timeframe is not having maintained at least some cash so that I could have joined many of you in picking up the likes of SLW at $2.51 instread of my 2005-2006 cost basis of $10+. 

Primero is struggling in the marketplace solely because its a relatively unknown entity. The gold is there in droves at San Dimas, and the management of that company is second to none. Keep the faith.

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#12) On January 21, 2011 at 12:17 PM, FleaBagger (28.14) wrote:

I've been trying to get my brother to buy silver, and I kind of hope it goes to $25. 

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#13) On January 21, 2011 at 2:56 PM, djshagggyd (72.54) wrote:

Bay and Sinch-

Thanks for the reassurance! Aside from the fact that it's a pink sheet with low volume, I really do love this investment. I'll definitely hold on and be patient.

Thanks again guys!

~justin 

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#14) On January 22, 2011 at 9:11 PM, Valyooo (99.47) wrote:

Sinch,

Remember how I said I bought CPFXF because 1) I like copper 2) You have the ability to move penny stocks or at the very least time them beautifully?

Well, come on don't tell me I am a fool (lowercase "f") for employing that strategy!  I am up huge on it (too bad it was such a tiny position).  Thanks for the write up on it!

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#15) On January 24, 2011 at 5:32 PM, magnetpal (< 20) wrote:

I am IN in "P" today after such a nice drop.:). Thanks Sinch.

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#16) On January 27, 2011 at 9:11 AM, Gonzhouse (24.16) wrote:

As Sinch predicted, Primero issued substantially higher reserves estimates today

http://www.primeromining.com/NEWS--Events/News-Releases-Details/2011/Primero-Reports-Record-Gold-and-Silver-Reserves-and-Resources-New-High-Grade-Sinaloa-Graben-Discoveries-and-Mineralization-at/default.aspx

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