Cage, I own shares in several precious metal securities, for example: NEM, G.TO, GLG.TO, IAG.TO, SSO.TO (SSRI), XCL.TO, MSV.TO, GDX. They are each different companies with different outlooks and risk profiles. Some are producing, some exploration only, some are centred in North America, others in Africa. Some are big and some are small. I own different companies for different reasons, but there is one underlying reason: I think that Gold and Silver are going to go up over the next couple of years, and these companies will go up as a result.
The GLG shares I got when GLG bought out WTC.TO. I don't think that GLG is a lost cause. If they can get their new mines into full production and keep their costs under control then they could do quite well, even if gold stays close to current prices. If they get Penasquito into production things look even better - particularly if the price of silver takes off. That being said, the share prices currently have a lot of expectations built into the price, so they had better not stumble.
I think that GLG may trade into a bit more of a headwind than G does, as GLG continues its transition from a company that trades on expectations to one that trades on results. I also think that theres a big test for G coming up when we get see how well Campbell has been integrated with the Red Lake operations.
Penasquito has turned into a much larger project, and GLG doesn't have the financial muscle to develop it. Goldcorp dollars will help to fund the ~ $900MM capital program for Penasquito.
I think that it's in my best interest that the deal goes through, so I will be voting my GLG shares in favour of the deal until a better offer comes along.
Given that you own shares of both companies, why would you choose to hold both given your thinking GG vis a vis GLG?
I think that I would be holding a lot less of these types of companies if I did not have the same expectation. I think that the gold still has has a long way to run.
I would hold neither if I did not believe the price of gold was about to rise rise in the near term and continue to do so
Regards,
John Sladek |
