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XMFSinchiruna (26.59)

The 1 Gold Miner That's Ready to Pounce



September 13, 2012 – Comments (11) | RELATED TICKERS: IAG , AUY

I took a few hours yesterday to survey the balance sheets of every mid-tier gold producer, and I was stunned to encounter such a pervasive pattern of modest liquidity that renders the group unlikely to engage in the sort of consolidation surge that we might otherwise expect to see when an industry is clawing its way back from a 15-year valuation low.

Yamana Gold, with its beautiful cash flow, is one exception, but we all know where they'll be focusing any further acquisitive moves. The sole other exception I found was IAMGOLD, which is in absolutely phenomenal position after its recent $500m note offering. What's more, because I was unable to pinpoint any conceivable need for this recent debt within the company's operating or existing growth development needs, it would appear reasonable to conclude that IAMGOLD has its eyes on a timely opportunity.

I'll be adding to my stake in IAG below $14 per share, and I look forward to holding strong straight through the Niobec expansion decision (and possible IPO) and beyond.

11 Comments – Post Your Own

#1) On September 13, 2012 at 12:55 PM, XMFSinchiruna (26.59) wrote:

Well, Thanks to Ben Bernanke, looks like I won't have a chance to add shares under $14, so I'll be content to add them beneath $15.

Thanks, Ben!

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#2) On September 13, 2012 at 1:14 PM, johnybottom (< 20) wrote:

Sinchiruna, I thankfully got in @ $14.14 earlier today.

 Uncle Ben is giving out free candy.

Jokes aside, I now need to figure out my go-forward plan. I'm a little too heavily invested in PMs/miners for comfort. I'll likely wait a week or so before taking some profits. Then I'll begin looking for other places to put my money/time.

 What is your go-forward plan? Will you rebalance into under-appreciated miners or other industries? Build cash position? Deplete cash position with purchases?

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#3) On September 13, 2012 at 1:52 PM, SN3165 (< 20) wrote:


I wonder if Valyooo is still around these days. He owes us "gold bugs" an apology.  

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#4) On September 13, 2012 at 2:08 PM, XMFSinchiruna (26.59) wrote:


I had been gradually building my cash position into this rally as I do during all major rallies, but QE3 just gave me a green light to go all in once more; which I have just done. My cash position is now essentially nil.

Over the coming weeks and months, of course, I will attempt to rebuild that cash position once again as the rally extends. As silver approaches $50 and gold approaches $2,000, I'll become more aggressive in my cash raising, with the intention of redeploying shortly after in preparation for the big breakouts above those levels. But I don't see myself being anything less than 80% allocated to mining stocks at least until we surpass $2,250 per ounce gold. By the time we approach $3,000 gold, I could see myself having reduced my allocation to more like 30%, depending upon how conditions unfold. That's based upon my current forward price expectations, and all of that is subject to change as conditions warrant.

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#5) On September 13, 2012 at 2:55 PM, SN3165 (< 20) wrote:

Sinch I just started trading options recently. Have relatively small positions but I think they will be big winners nevertheless.

What do you think about the following speculative positions:

AGQ Jan 19 '13  (Ultra Silver) $120 Call (Very small position)

TBT Jan 18 '14  (Short Treasuries) $20 Call

SLW Dec 22 '12  $38 Call 

EXK Jan 19 '13  $10 Call

BTU Jan 18 '14  $33 Call (biggest position out of these) 

 I am also up big on the SLW '13 warrants ... shed 10 percent of my position...  :-)

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#6) On September 13, 2012 at 8:45 PM, outoffocus (24.13) wrote:


I got in on a CDE  leap with a strike of $30 while CDE was $15.  Needless to say...

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#7) On September 13, 2012 at 10:01 PM, SN3165 (< 20) wrote:

Wow! Good call.

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#8) On September 14, 2012 at 6:59 AM, skypilot2005 (< 20) wrote:


Thanks, for the coverage of IAG.  I'll pick some up after I complete my own D. D.

But today, I feel Aurcana is the best "buy" out there of all P. M. stocks by a "wide margin".:

Corporate Presentation

Sept. 2012


Sprott owns 9%

Aurcana Corporation Announces Updated Resource Estimate for La Negra Mine


Mr Lenic Rodriguez, President & CEO stated: “I am very pleased with the results of the NI 43-101 compliant resource estimate that shows a 50 fold increase from the prior Measured and Indicated resource estimate of 2.3 million ounces of silver to the current estimate of over 115 million ounces of silver, plus significant base metals, which confirms an extended life of mine at La Negra. We have already started the certification of the new discoveries on the North West trend where the silver grades are higher and which we expect to report to the public in the near future. La Negra continues mining primarily from new discoveries”.


Mon Aug 20, 2012
Aurcana Reports Record Results for Q2, 2012

7% increase in net revenues to $13.3 million compared to $12.4 million for the second quarter of 2011. 4% increase in earnings from mining operations to $5.5 million compared to $5.3 million for the second quarter of 2011. 50% increase in net income to $3.4 million for the first six months of 2012 compared to $2.3 million for the first six months of 2011. 106% increase in operating cash flow before movements in working capital items, to $4.7 million compared to $2.3 million for the second quarter of 2011. 18% increase in milled tonnes processed for a total of 307,161 during the six months ended June 30, 2012 (2011: 260,931); of which 15% (45,588 tonnes) were mined from NI 43-101 Measured and Indicated resources and 85% (261,573 tonnes) were mined from new discoveries. 23% increase in silver ounces sold for the second quarter of 2012 to 323,307 (373,037 ounces produced) from 263,357 silver ounces in 2011. Metal prices were a significant factor in revenues of the Company. Due to a general economic slowdown, average silver prices in the second quarter of 2012 were $28.51 compared to $36.86 per ounce in the second quarter of 2011. 52% increase in silver equivalent ounces produced to 690,162 in the second quarter of 2012 (2011: 455, 516).


Now excuse me but, I have to turn my "value detector" alarm off.


 Respectfully, Sky 


Your Official Web Link Assistant.  


I am buying Aurcana "hand over fist". 


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#9) On September 14, 2012 at 10:07 AM, XMFSinchiruna (26.59) wrote:

SN, Sorry, I don't trade options. I won't touch margin with a 10-foot pole. And while I'm willing to predict likely price targets for my favorite equities, I stop short of attaching a specific timeframe to those targets. I certainly understand the temptation to goose returns, but it's simply not for me. I'm an old-school buy-and-hold guy.

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#10) On September 14, 2012 at 11:15 AM, XMFSinchiruna (26.59) wrote:

Just a few of the names I'm focusing on here: 

Trevali Mining is starting to move, and I'm feeling pretty bullish about it. I've met this company's management, and I'm continually impressed with their execution on both recent construction projects.


Pilot Gold just broke out of a trading range, with powerful potential to run quickly to about $1.80 even without any further news like the terrific stream of news that they've been producing over the past year or more.


Major Drilling was a major purchase for me near $9.40 a couple of weeks back, and I'm thrilled with the selection. I'm looking for a double while receiving nearly a 2% yield.


I finally have a major position in Sandstorm Gold. I know, I know... I'm a litle late. :)


I increased my position in Huldra Silver, looking for a nice pop as they move into production. Wouldn't be my first multi-bagger to come from a speedybure recommendation.


I also added more Cardero near $0.73. (CDY) It remains my second largest holding after Alexandria Minerals. And speaking of Alexandria, that stock's recovery off its low has been simply breathtaking.

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#11) On September 16, 2012 at 7:42 PM, SN3165 (< 20) wrote:

Sinch, Jim Sinclair has written numerous times on his blog about (DRS) Direct Registration of shares (as oppose to the common street name registration) you personally prefer to hold shares in DRS or in "Street name" ?

- SN

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