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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: Claude Cormier who wrote (25439)11/14/2006 7:32:15 PM
From: Mr. Aloha  Read Replies (1) of 78409
 
I don't mean the current base metals producers, whose prices would collapse if the metals collapse. I mean preproduction juniors that also have silver/gold, like MMG, which trades at a fraction of what their annual cash flow from zinc alone would be even if zinc collapsed to under $1. IMO, MMG's stock price will still be higher than it is now if zinc is under $1 when it goes to production. If base metal prices collapse, companies like MMG, RMKL, and ADA can shift focus to developing their precious metals.

I prefer the non-gold only stocks because they trade at a discount to the gold only stocks, and their metals are "consumed" rather than "accumulated". LOL. I think we'll eventually run out of some base metals (http://www.sciam.com/article.cfm?articleID=000CEA15-3272-13C8-9BFE83414B7FFE87 ) but we'll never run out of gold (though gold will become much more valuable). I prefer juniors that are pricing in far lower metals prices rather than producers that are closer to fully valued. I focus on the present value of expected future cash flows, discounted for risk and time.

If the global economy grows over the long term, base metal prices should stay high and gold and silver should do well, too.
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