Some gold comments from Peter Grandich:
"As we speak, the worldwide mining industry is in a state of
gloom due to the dramatic decline in gold prices. The junior
resource segment of the industry has been especially hit hard
due to the fact that the Bre-X fiasco had severely hindered
their ability to raise capital at attractive share prices, well
before gold prices sank.
To fully appreciate the extent of the pain, one only has to look
at the percentage decline of junior exploration and mining
stocks from their 52-week high. 70%, 80%, even 90% declines are
very common. Simply put, this is not a bear market, or a crash.
It's pure "devastation". And unless there's a dramatic increase
in gold prices (whoever thought the industry would pop open Dom
Perignon on a close above $350), the best one can hope for in
the next few months is a relief rally in the New Year.
The bottom line to gold and mining shares is this. We have
either retested a critical support level in gold ($275-$285)
that has held before and has led to significant rallies in which
case the gloom and doom is the ultimate contrary indicator, or,
the belief that central banks have indeed demonetized gold and
it will languish in the $200's for years thereby causing a large
chunk of the industry to disappear is correct.
As a compensated consultant to mainly junior resource companies,
trust me when I say I hope the latter isn't the case.
So, on the belief that we have just revisited a price level that
has proven to be a superb buying opportunity in the past, I have
for my own portfolio aggressively purchased large sums of mining
and exploration stocks (you must consult with your own financial
advisor in order to know what is appropriate for you).
Some of the stocks I purchased quite aggressively or intend to
are:
Bema Gold
Crystallex International
Eldorado Gold
Manhattan Minerals
Nevsun Resources
All five are legitimate takeover or merger candidates for 1998
and have the potential to bounce back sharply from their
December lows in January (except Crystallex which is a very
special situation). " |
