Investment Q&A

Q: Good Morning,

Could you please comment on Rio Alto's (RIO) production numbers released today.

Thanks,

Eric

Q: Good evening, Peter.
May I have your thoughts on Mandalay Resources' (MND)report of Q2 production and sales? Are the numbers significant?"
Thanks,
Ed

Q: Peter,

I have a link below to a King World News interview with William Kaye. I was curious about your take on his comments on the physical gold market, if you have a take.

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2013/7/10_William_Kaye.html

Thank you,

Marc

Q: Hi Peter.
I currently own SAS, St Andrews Goldfields which is down arond 40% as the overall gold stock group. If i am correct ,seems like there average production cost is 1316$ per ounce, which would be almost double the industry average of 700$.on the other hand ,they have uncerverred high graeds and plan to expand to 125,000 in 2014. What is your outlokk on SAS and would it be a long term HOLD/
Thank you and have a good day.

Q: hi peter and team. could you give names of the lowest cost of gold producers . i was told alamos gold is one the the low cost names

Q: I have shares in G - . what do you think will happen because of the forest fires in Quebec shutting down their construction site .
Thanks Jim

Q: Hi 5i team
Any thoughts on Horizon's SilverYLD - HZY - Last at $5.05 with a 9% yield paid monthly. With the potential rebound in silver over the next couple of years, would you recommend a position?
GUY

Q: I currently have no gold stocks? Any specific company or ETF recommendations? Thanks again - John

Q: Hello, what is your opinion on PRU- Perseus Mining? They are no a producer and seem to have a decent balance sheet. Is this a good buy?

Q: Hi Peter, Mandalay Resources (MND) has been weak. Realised its not company specefic. Do you still like the company and would you still recommned it? Thanks,

Q: Hi since the last time Rainy River (RR) was asked, I would like your opinion of how I should choose in being bought out. I bought it @ $10.78 and is being bought out @ $3.83 cash (~65% loss) or to receive 0.5 of a common share of New Gold. I actually do have New Gold and bought it @ $3.21 a long time ago = a huge gain. What would you do in this case scenario? Can the cash offer in this case be claimed as a tax loss? Or should I take option 2 and add more shares to NGD? I believe NGD is a great company still b/c it was like a merger of 3 great companies back in the old days and was talked about when I started listening to BNN! I don't think these types of questions have ever been asked and welcome your knowledge. Thanks.

Q: Hi, regarding CEF.A, recently the share price has been 5% below NAV. I recall several months ago it was pretty much at NAV. For a fund like this that basically tracks the price of gold/silver (in theory), is my thinking correct that it may be better to purchase the fund than actually purchasing the bullion? This also avoids transaction costs and delivery charges. The fund seems to be audited; do you see this as a prudent strategy when the fund is trading below NAV based on market fear?

Q: Good Morning Peter and Team,
With gold and silver prices steadily falling I have been looking at the big streaming companies (Franco Nevada- FNV-T and Silver Wheaton- SLW-T). In the shorter term they will suffer from low selling prices but on the flip side they are likely to see wonderful opportunities in this environment to negotiate advantageous streaming deals with financially stressed producers. I would appreciate your opinion of this line of thinking. Thank you. DL

Q: I hold ABX (US Account), G, YRI, XGD plus some bullion (combined <5% of portfolio). Though underwater on all to varying degrees, I am in no panic to sell and will add to some positions over time. Do you see any value in selling the XGD or ABX which have the biggest losses and moving the money into YRI or G? To which of these choices would you be most inclined to add? Thanks for a great service.

Q: could you explain "short squeeze" and how it pretains to the gold sector with this continued shorting of the gold price

Q: I currently own AR (Argonaut Gold), BTO (B2 Gold) and SSL (sandstorm Gold), and am considering adding SLW (Silver Wheaton). There is usually a good seasonal trade (i.e. buy) in gold & silver beginning around mid-July. With the price of gold so low, and sentiment seemly continuing to be poor, do think the seasonal trade may still be there? Also, with the price being low do you see any issues with the 4 names mentioned? i.e. ability to finance debt, or closing mines (like Barrick & Kinross), etc... thanks again!

Q: Hello, ABX - My last question on ABX (and your answer) on Jan 8, 2013 is mentioned below. How do you feel about it now. Down 50%, shall I keep holding expecting a turnaround in 1.5 -2 years. Is dividend safe. OR shall take a loss and move on.
-------------------------
January 08, 2013 (asked by r)
Question: Barrick - ABX. What is your opinion about the stock prospect in lieu of recent developments. Is it buy hold or sell.
5i Research Answer:
Barrick continues to have problems. The lack of sale of African Barrick is disappointing, but it is not a devastating blow. ABX's interest is worth just over $2 billion. Pueblo Viejo in the DR is another issue, and has not yet achieved commercial production. ABX will likely have to lower its production guidance for 2013.
But, many of its problems are reflected in the price. Down 30% in a year, trading a 8 times' earnings with a 2.4% dividend, it is attractively priced for a senior gold company with massive leverage to a higher gold price.
A few years ago, if we said you could buy Barrick below 10 times' earnings with a yield greater than most fixed-income investments, no one would have believed it.
Longer term gold investors should still be OK and do well with ABX.

Q: Hi Peter and 5i: Can you please comment on this as one possible case against investing in gold equities: Ultimately you can't fully evaluate the situation on the basis of how much the gold stocks have come down and how "cheap" their current prices may appear compared to themselves of 6 to 12 months ago. The bottom line is all about the price of the commodity. The price of gold went up more than 450% over a dozen years reaching its most recent peaks. It has now backed off about 30% from those peaks to just about where it was three years ago. Is gold itself cheap or expensive? Will it be worth more or less in 6 months time? I have no way of knowing. Gold is just worth what people want to pay for it; there is no industrial need that it serves that could kick in and provide a reliable floor. Gold equities only have any value at all relative to some assumed commodity price. If gold itself drops to below the cost of production for a gold miner, that miner's stock has close to zero value - all that is left is what it might be worth if the price of gold turns around and zooms back up again. Thanks!

Q: Hello,
Would you recommend to start building a position in the silver market through SLW at this time ? I have a 3-5 year time horizon. Thank you agsain for the great service. Regards.

Q: A BNN guest suggested selling resource and materials stocks which are down 15-20 % ytd now before tax loss selling begins in the Fall which is sure to drive them down much further. The idea being that they can be bought much cheaper later in the year.

That sounds pretty drastic. Would you agree, disagree or have a different perspective?

Thanks.