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Strategies & Market Trends : Value Investing
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To: Madharry who wrote (41929)3/25/2011 1:00:31 PM
From: E_K_S  Read Replies (1) of 78717
 
Hi Madharry -

Repositioned some of my gold holdings. Sold 50% of my AngloGold Ashanti Ltd. (AU) and bought positions in the Market Vectors® Junior Gold Miners ETF (GDXJ) and started a tracking position in Richmont Mines Inc. (RIC).

The value proposition is that as gold moves to new high, these small and midsized junior miners will become profitable and more importantly own mines with large reserves that become attractive for acquisition from the mega Cap miners (like AU).

Therefore, my basket of junior miners are made up of from the GDXJ Index as well as my own addition in RIC (w/ a small tracking position).

Market Vectors Junior Gold Miners ETF (GDXJ)
vaneck.com

The Market Vectors Junior Gold Miners Index - The index tracks the overall performance of foreign and domestic publicly traded companies of small- and medium-capitalization that are involved primarily in the mining for gold and/or silver.

This is a reallocation trade for me into a more diversified basket of Junior mining stocks.

finance.yahoo.com

FWIW - RIC is family owned and operated. The family still owns a substantial stake of the company and have a vested interest to see their growth plans achieved. The company is profitable and currently has 1 million ounces of gold reserves and last year sold 70K ounces of gold. Their goal is to produce 200K of Gold/year and maintain a 5x reserve base.

EKS
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