Of Interest,(Applies to: NEM PDG ABX BMG KGC CBJ TVX BGO AEM)
The Wall Street Transcript Publishes Gold Stocks Report
NEW YORK, Mar 9, 2000 /PRNewswire via COMTEX/ -- Todd Hinrichs, Vice President,
Senior Precious Metals Analyst at ABN AMRO, examines the outlook for Gold Stocks
in this timely and deeply informative 4,000-word interview available from The
Wall Street Transcript (212-952-7433) or twst.com
In a vital review of this evolving sector for investors and industry
professionals, this Gold Stocks Report features an in-depth analysis of the
sector by leading expert Todd Hinrichs, Vice President, Senior Precious Metals
Analyst at ABN AMRO.
Hinrichs discusses the Gold equities issue, gives his opinion on the future of
the companies and also shares his current stocks recommendations.
Hinrichs comments on the past few weeks on the improvement in the price of gold:
"Over the past few weeks, several major gold producers that are notoriously
aggressive hedgers assumed a less aggressive stance toward hedging in today's
market. And this less aggressive stance, by major gold producers, pushed gold
prices a little bit higher. Less hedging activity, the perception that Asia is
turning around very quickly, and the advent of the Washington Agreement are
three very important reasons why gold prices continue to rally off their
mid-1999 lows in the low $250s. Now gold is trading at roughly $308 per ounce."
"One company that I really like right now is Newmont Mining (NYSE: NEM)," states
Hinrichs. "The shares are $23. The company is fairly unhedged, and I think it's
undervalued at these levels. I believe that analysts' estimates are probably too
low for this year. The company should have a very, very good year -- especially
if gold prices continue to rally."
About Placer Dome (NYSE: PDG), Hinrichs says, "They have a solid backbone of
operations, very low-cost operations, a very manageable hedge book, and they
also have some higher-cost operations that would, in times of higher gold
prices, become very attractive. And that gives the company leverage to higher
gold prices. So because of the company's backbone of low-cost operations,
downside is somewhat limited, while upside remains very good for times of higher
gold prices. I think it's the stock for all seasons, the company for all gold
price environments."
Hinrichs declares, "I very much like Barrick Gold (NYSE: ABX). The one thing
that stops me from aggressively purchasing the stock -- I have an Outperform on
Barrick's shares -- is that I simply believe the company is not leveraged
enough. Barrick is probably among the best-managed, most solid companies." He
adds, "One interesting development with respect to Barrick, however -- and this
occurred during the last several weeks -- is that Barrick Gold recently
purchased a fairly large call position. Finally he states, "This is something
the company has never done before -- a gutsy move of sorts -- which says to me
that management is quite confident that the price of gold is going to move
higher. In fact, they are betting that gold prices will move a lot higher. And
if gold prices rise, they are definitely positioned to benefit over the next two
years."
"I would place Battle Mountain Gold (NYSE: BMG) and Kinross Gold (NYSE: KGC) in
kind of the same category," Hinrichs continues. "Their shares have been hovering
between $1.50 and $2.50. But they're very large producers that I consider
undervalued relative to senior producers. Those two producers are, I believe,
among the best plays in the sector in the event of materially higher gold
prices, but they're somewhat leveraged -- especially Battle Mountain with
respect to the company's fairly large debt profile. Battle Mountain Gold has
some of the lowest cash costs in the industry, which would tend to make you
believe that this is a great buying opportunity."
Hinrichs comments on small cap stocks, "If you were to look at an analyst's
quote machine, you would probably see the remnants of the great gold bull market
-- but at much lower levels than they once were. In terms of smaller gold
producers and explorers, Cambior (Amex: CBJ) is at $1.40, TVX Gold (NYSE: TVX)
at less than $1, Bema Gold (Amex: BGO) at less than $1, Arizona Star (Vancouver:
AZS.V) at C$1." Hinrichs adds, "And when a stock falls below $1, you can hardly
buy it because the transaction costs are so great per share that it's hardly
worth looking at them."
Hinrichs provides his thoughts on the mid-caps: "Agnico-Eagle Mines (NYSE: AEM)
is developing an incredibly low-cost, high potential set of orebodies at its
LaRonde mine in Quebec. This company has been my top pick in the mid-cap
universe over the last year or two. It remains my top pick in the mid-cap
universe for 2000."
To obtain a copy of this insightful 4,000-word report, call (212) 952-7433 or
see twst.com .
This report is included in the NATURAL RESOURCES sector of TWST Online at
twst.com .
The Wall Street Transcript is a premier weekly investment publication
interviewing market professionals for serious investors for over 36 years.
Available at twst.com TWST Online provides hundreds of free interview
excerpts. For recent recommendations by analysts and money managers visit
twst.com .
The Wall Street Transcript does not endorse the views of any interviewee nor
does it make stock recommendations.
SOURCE The Wall Street Transcript
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