Gold zigzagged this week and many investors felt frustrated. I don’t blame them.
But rather than grind your teeth, the thing to do is use weaknesses to your advantage and make a shopping list of stocks you want to own.
This past week, I sent my Gold & Silver Trader subscribers a “Dazzling Dozen” of miners, developers and explorers. In other words, my short list of stocks I want to own for the next blast-off in gold.
And the blast-off is coming — there’s little doubt about that. I’ve pounded the table about incredible forces lining up to push gold to $3,000 and beyond.
Today, I’m going to share with you three stocks that are on my short list. The thing they all have in common — besides being gold miners — is that we’ve owned them all in Gold & Silver Trader before.
That’s part of our strategy in that service — buy a stock, watch it go up (hopefully) and then set a protective stop to lock in gains. That way, if gold and miners continue going higher, we can go along for the ride to profit town. If gold and miners pull back, we get stopped out with a gain.
So, here are three picks from my Dazzling Dozen short list that we got stopped out of, but will buy again:
Hot Pick No. 1. Alamos Gold Inc. (NYSE: AGI, Rated “C”)
Gold & Silver Trader subscribers exited Alamos on Aug. 11 for a tracked gain of 22.78%. That was the second round of gains on Alamos, as we grabbed a 31.57% gain on July 14. Not bad for owning it for two months!
Why do I like Alamos? This underground miner has three producing assets in Canada and Mexico, and it is poised for greatness. This year, it should produce 405,000 to 435,000 ounces of gold, as all-in sustaining costs (AISC) went up slightly to a range of $1,030 to $1,070 per ounce.
Two great things about this stock are that it keeps finding more gold and it is transforming itself from an above-average-cost producer to a lower-cost producer. That transformation should be complete by 2023. I wonder what price gold will be trading at then?
Hot Pick No. 2. DRDGold Limited (NYSE: DRD, Rated “B-”)
Gold & Silver Trader subscribers were stopped out of DRDGold on July 23 with a tracked gain of 33.7%. That was their second gain on the stock. We tracked a 25.98% gain on the first half, exited on July 14. This is after owning the stock for only a little more than a month!
DRDGold is a bit unique in that it owns no mines. Instead, it processes tailings from old mines, which South Africa has in abundance.
The company has reserves of 5.8 million ounces of gold and resources of 9.8 million ounces of gold. The balance sheet is very strong with no debt and a cash position of $102.5 million as of March 2020. DRDGold expects to produce between 175,000 and 190,000 ounces of gold in fiscal 2020. That forecast was lowered from the original target due to the pandemic.
Its AISC is $1,085 per ounce, though new processing facilities the company is building could raise costs. The company has $100 million in the bank, a nice position to be in.
Sure, there’s geopolitical risk for a stock operating in South Africa. But that doesn’t seem to matter much as DRDGold is on a rocket ride, one with dips that are buying opportunities.
Hot Pick No. 3. K92 Mining Inc. (OTCQX: KNTNF, Rated “B”)
Subscribers stopped out of K92 on July 14 for a 16.55% gain. Not bad for owning it slightly over a month. The reason we’re looking to get back in, despite the fact the company is tracking well below its 2020 production guidance, is because the recent weakness is due to COVID-19. That is a risk for miners, but one that can be handled.
Looking at the chart, you can see that K92 ramped up mightily, then broke out to the upside. A pullback is likely, but that pullback can be bought.
Why? Because success delayed is not denied. In fact, I expect K92 to ramp up to processing 1,100 tons per day of ore, as targeted, once it puts the pandemic in the rear-view mirror. K92 is a high-grade, low-cost miner at its Kainantu gold/copper project in Papua New Guinea, and it’s finding more gold all the time.
Darned right I want to own this one.
Remember, these are just three examples from the Dazzling Dozen list To sum it up: I’m making my list. I’m checking it twice. When gold ramps up again, owning these stocks will be oh-so-nice.
Sure, we can see a deeper pullback in gold before the next ramp-up. Gold always zig-zags. That’s okay. The metal is in a big bull market. This is going to be SO much fun.
So get started on your own gold wish list.
All the best,