Issue #129
Dear Member,
| Recommendation:1. Buy 250 shares of IAMGOLD Corp., symbol IAG, at the market.
I will monitor a stop for you. |
Let me be perfectly clear: Despite the fact that gold had a nasty move down last week and broke support levels at $1,278 and $1,268 …
All of my models continue to suggest, very strongly, that gold and silver are in a major bottoming phase.
Yes, both metals could fall a tad lower. But mark my words: The next MAJOR moves in gold and silver will find them catapulting towards $1,449 in gold, then $1,600 … and toward $24 in silver, and then even higher.
What will drive the precious metals higher? Everything I have been warning you about, namely, the war cycles and how they are causing geo-political stress all over the globe to dramatically rise.
Based on all of my indicators and all of my research, I believe the mining sector is also in the process of bottoming.
This is very important. Chief reason: Some of the most outstanding profit potential going forward will be found in select companies in the gold and silver mining sector.
I say select — because not all mining companies will thrive in this next bull market phase for the precious metals.
For reasons I’ve spelled out previously, many mining companies simply won’t have what it takes to participate in the bull market that is now forming. They won’t be able to spin off profits or increased value for shareholders. So we will have to indeed, be very selective.
Major New Mining Share Recommendation. Buy Shares in IAMGOLD Immediately.
We’re going to start with one of my favorite mid-tier gold producers, IAMGOLD, symbol IAG.
IAMGOLD is a junior producer with operating mines in Quebec, Mali, Suriname in South America and Burkina Faso in West Africa.
The company has roughly 11.3 million ounces of proven and probable gold and another 17.4 million ounces of potential gold resources.
In addition, IAG is now producing more than 830,000 ounces of gold per year, at a cash cost of roughly $715 per ounce, and an all-in sustaining mining cost of $1,038 an ounce, 15 percent lower than last year.
Like many miners, IAG has taken its lumps over the last three years as the price of gold fell, with many investors focusing all too much on the company’s ore grades and debt.
But in my opinion, management has recently taken all the right steps to reduce debt (now at only 15 percent of total assets) and to further slash mining costs, per the 15 percent decline in all-in costs noted above.
Moreover, the company does not hedge its gold reserves, a major positive.
Most importantly is the company’s share price, which is now trading at roughly $3.07 — down more than 87 percent from its record high of $24 when gold was over $1,900 an ounce three years ago.
My view: IAG’s shares are a steal at current levels.
IAG is a great mid-tier gold miner, and as gold’s new bull market begins to unfold, I believe IAG’s share price can rocket higher.
Look at it this way: The company is in better shape today than it was when gold was fetching over $1,900 an ounce and the company’s share price was $24.
If gold were to just move back to $1,900, the share price should easily match its former highs. From the $3.07 level to $24 — would equate to a potential gain of better than 680 percent.
But it doesn’t stop there. As you know, I expect gold to reach at least $5,000 over the next three years. At $5,000 gold, more than double its 2011 price high of $1,921 …
IAG’s share price should trade hands at a tad north of $62, a more than 1,900 percent gain in its share price.
And even if I’m only half right and IAGs share price soars to say $31, you’d still be staring at more than a 900 percent gain on your investment.
Bottom line: I recommend buying shares in IAG at the market, per the recommendation in the above table. I will monitor a stop for you. Plan on actively trading roughly half the shares, and holding the other half longer-term.
Finally, hold all other positions and stay tuned!
Best wishes,
Larry
