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Gold/Mining/Energy : DISCOVERY BOARD ~ PRECIOUS METALS ENERGY URANIUM OIL -- Ignore unavailable to you. Want to Upgrade?

To: DrBill who wrote (4312)	8/30/2011 11:32:44 PM
From: DrBill	1 Recommendation Read Replies (1) \| Respond to of 4690

Gold Miners Seen As Cheapest In 20 Years; Cash Cows Include KGC, NEM, GG, ABX By Murray Coleman Two weeks ago, Frank Holmes predicted that a pullback in gold was coming, noting that a 10% haircut would be a “non-event.” The CEO of U.S. Global Investors ( GROW) turns his attention in his latest weekly commentary to the gap between bullion and lagging mining stocks. The SPDR Gold ETF ( GLD) in 2011 had gained 26.5% through yesterday. Meanwhile, the Market Vectors Gold Miners ETF ( GDX) had returned 0.9%. Holmes points to a report this week from BMO Capital Markets that offers one interesting valuation metric that might explain the divergence. Analysts at BMO wrote: “The rate of change in the gold price has been high over the past decade, perhaps too high for investors to gain confidence in that price as sustainable for an equity investment decision.” Using the implied value of a defined group of global gold stocks, BMO calculated the internal rate of return to measure how gold stocks underperformed compared to bullion. During the past 20 years, BMO found that the group of gold stocks had never been this inexpensive. In fact, only twice did they approached today’s levels — once during the tech bubble in 2000 and then again during the credit crisis in 2008. Another research piece by RBC Capital Markets discovered that gold companies currently have margins that are at record highs. The firm’s analysts believe that margins could remain in the $1,200 an ounce range for the next year or two. By comparison, the 10-year average is around $320 an ounce. The RBC report says that gold miners have reached an “inflection point” with a “substantial wave of free cash flow” coming over the next one- to two-years. Holmes points to Barrick ( ABX), Goldcorp ( GG), Kinross ( KGC) and Newmont ( NEM) as top-tier examples of the industry’s new wave of cash cows.

To: DrBill who wrote (4312)	8/31/2011 12:59:40 AM
From: PaperPerson	Read Replies (1) \| Respond to of 4690

Good take on how cheap northgate was for AU Rico. Further evidence of what we hv been saying here. Junior PM producers are dirt cheap and are begging to be bought. So are their warrants and longer term calls. Today was one of those great days when you could feel the market moving our way. Claude, north American palladium, primero, u.s. Silver etc