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Politics : Gold and Silver Stocks and Related Commentary -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (10561)	4/8/2005 10:12:30 AM
From: Claude Cormier	Respond to of 18308

<Perhaps not so risky if your short is hedged by a holding of warrants ?> Interesting idea. <Well there's always growth by acquisition. But there's a "junior" in every senior and intermediate gold stock.> Yes. But what a 2M ounces discovery will do to the bottom line of a senior? < AGE has just undertaken an exciting exploration venture in Mexico. > Yes. Good move. But AGE is a market cap of $1.5B... What happens to the stock if they discover 2M ounces...? Not much. The bigger stocks needs much bigger discoveries to impact on their NAV... As for acquisition, they are not always accretive. <Northgate's future depends upon exploration success (or acquisition) NGX is much smaller with a market cap of $300M.. a 2M ounces (or equivalent) discovery would increase its value by at least 50%. That is in my ball game. <And surely Barrick itself with its string of new mines to come, is growing from exploration efforts.> WHat do you need to move a $15B market cap. Even a 10 millions ounces deposits worth $500-$1B will not significantly increase ABX bottom line... beside they lose almost as much per year from production. No the way I see it, only a gold bull can save those stocks. Seriously, with your confidence in the future of gold prices, why hedge by shorting the sector at all ? Doesn't diversification on the long side produce the same reduction of volatility ?