The (New) Greatest Gold Stock in the World
It is my sincere hope that most of my regular readers will have enjoyed the sudden surge in Northgate Minerals shares as a result of AuRico Gold's all-stock friendly acquisition bid. After all, NXG was #2 on my list of top picks for 2011, was the subject of this vocal reiteration of my bullish outlook back in May, and then became my top pick as the greatest gold stock in the world following last month's announcement of the deal with Primero Mining.
I retain my strong recommendation of AuRico shares following this enormously strategic acquisition, and now look for the miner to grow into one of the top intermediate gold producers in the world. While it's still high on my list, another stock just became my new top pick for gold.
Primero Mining is right back to where I was actively acquiring shares before the prior Northgate / Primero announcement. Only now the company has a NYSE ticker under its belt, a $25 break fee from Northgate, and a gold investment community that is now aware of the extent to which San Dimas offers a terrific springboard asset from which to launch the industry's next mid-tier rocket.
The silver-stream tax issue is an unfortunate one, but not a lasting game-changer in my opinion. They'll work it out, and at these valuations I feel the matter has been more than fully discounted. I will endeavor to acquire a more comprehensive understanding of the underlying issues beyond the somewhat vague discussions contained in company filings, and report my findings to you accordingly.
Primero is now my #3 equity holding, though names like Brigus and Claude have also figured prominently on my buy-list lately. Anywhere under $4, they're giving Primero away, and I honestly think part of that has to do with the the market's unfamiliarity with the company and its cornerstone asset. Like Great Panther, understanding the true potential of the asset requires more than a mere peak at stated reserves. The company has now come into the spotlight, and folks will now begin to perform their DD in earnest.
Please review this analysis of Primero's founding transaction with GG (which owns a 35.5% stake in Primero):