Alamos Gold Inc (AGI.TO)

Doesn’t own this, but it falls within the spectrum of the companies that he likes. It has a mine in Ontario with Canadian cost of production. However, it is not benefiting the way others are. He recommends you add to those producers who have been moving over the last year, such as Detour Gold (DGC-T). Thinks this company will go through this as well.

They merged with another company last year. It is a large producing mine and strategic to them. It is down because they deferred some of their down-the-road production to focus on the current project. He prefers larger names. He does not like these transition periods.

The problem is that it is making lower highs and lower lows. The other possible problem with the stock is that the underlying commodity, gold, is declining. Gold itself has broken technical support. He has a problem with gold itself and most of the gold producers. What you want to see is confirmation that it is making a base and breaking of the trend line. At this point, this is still in a downtrend.

His company has this as a sector outperform. The 3 qualities that he looks for in these companies are good management, low production cost and where they are located politically. He thinks this will have the leverage when we have the re-bounce in the price of gold.

Rising interest rates could put downward pressure on gold. Chart shows a long downward trend from 2013, but a small base is showing. If it broke down through that low, that would be a concern. He would give it a 2%-3%, maybe a little bit wider berth of breaking the trend line before deciding if you should Hold or Sell.

So far the highs are most definitely getting lower. The one potential positive is that the most recent price is lining up with the past low. If the stock holds at its support level in July, then your next target of resistance is going to be around $5.50 area. If that is taken out, then major resistance comes in at $8.40. He would not buy this unless it held its current level. If it does and it moves up, then take a position. If it then broke the $5.50, then take a 2^nd position.

This has a very, very strong balance sheet, with about $4 in cash per share. Fairly recently a company merged with them because it had a weak balance sheet and it needed Alamos’ strength. He really likes this company and is buying it principally for its balance sheet.

(A Top Pick May 30/14. Down 13.9%.) This was a poster child for delivering free cash flow. Earlier in the year they announced that grades were going to be lower than expected, so free cash flow is going to drop. Also, announced the 2016-2017 projects they had in their pipeline were now more 2017-2018. Because free cash flow looked quite diminished, he exited the position.

A cheap gold company and a stunning balance sheet. You have to hold golds in your portfolio with what central banks are doing around the world. It is insane and eventually these things catch up.

A higher quality company. Gold is almost at the highs that it was a few years ago in Cdn$ terms. Doesn’t think this company has anything particularly good, so you actually really need a movement in the gold price. Nothing dynamic right now to be in this.

Like all gold companies right now, with the price of gold trading at $1200, FMV is nothing to write home about. The leverage on a rebound in gold pricing in 2015-2016 could be really quite something.

(A Top Pick Sept 17/13. Down 37.05%.) Was almost thinking of adding it as a Top Pick again, but the timing wasn’t quite right. They are going in through a pocket of lower material now, so earnings and cash flow are not as high. Still have a lot of cash. Thinks they will continue to move forward and get their grades and production back up, but the market just doesn’t care.

(A Top Pick June 6/13. Down 28.46%.) Has fallen from grace. Unfortunately, in their transitions of zones, you are going to see lower production and higher costs. Sold his holdings in mid-January. Prefers others.

(A Top Pick May 14/13. Down 38.27%.) Most of this underperformance came in the 1^st quarter. They put out a quarter that they expected to get into high-grade and the grade ended up not being there. Also, unrest in Turkey hurt them. Based upon their production in Mexico alone, the business is worth $10 a share. Has the best balance sheet with $250,000 in cash.

(A Top Pick March 4/13. Down 21.52%.) Has about $450 million in cash on their balance sheet. At the beginning of this year, they announced that in the following year they are going to see lower production and higher cash costs and the market decided they didn’t like it any more. Also, one of the managers in Turkey resigned today and that hit the stock. Still thinks it’s a good company and still likes and would consider adding more to his holdings.