I see Gold as a great place for capital gains for at least the next two years. I’m positioning me and my subscribers in junior producers that can generate big jumps in cash flow and resource size over that time.
Gold is benefiting from MANY trends right now
- Negative interest rates around the world (they’re going more negative than you can imagine…)
- China-US trade war
- Global investors being massively underweight the sector
- Central Banks are net buyers of gold
- Gold’s short, medium and long term charts look GREAT
Because of all this, I see the Gold Price going MUCH higher – in the near to medium term. I see US$2000/oz in the cards. That means cash flows and stock prices are also going much higher – in the short to medium term.
A lot of money will get made in Gold in the coming two years, and I want to make as much as possible. So I went looking for what new mines are coming into production in the next couple years, and see which ones have the lowest cost of production.
At this early stage in the Gold cycle, this strategy makes the most sense to me. The Market won’t price in production more than a year out, so I’m still able to buy these stocks at a dirt-cheap valuation.
After weeks of research, I found the one I wanted to buy BIG – and I just bought 450,000 shares of it. It was a ridiculous cheap price too – just 21 cents a share. TWENTY-ONE CENTS. Crazy – for an asset that will be churning out tens of millions in cash flow within two years.
They already have over 2 million ounces identified, but I expect an aggressive drilling campaign to increase that A LOT in the coming months.
And as their new low cost mine comes into production – and when I say low cost, I mean All-In-Sustaining-
Costs (AISC) under $800/oz, the Market will reward shareholders. It’s a low cost, open pit mine that will be cheap to build and produce ounces cheaply.
And this asset was designed for $900 Gold. Prior to Gold’s breakout a few months ago, finance money for Gold was tight – and no new asset would get funded unless it made a pile of money at $900 Gold.
Imagine what the economics are for this asset now – at $1500 Gold – or $2000 Gold. The payback and profitability are OFF THE CHARTS for these assets. These assets will be MAJOR CASH COWS in today’s new world of Gold.
And investors can still buy this stock for a bag of pucks. Nothing.
It’s a great set up for investors. I’m spending a HUGE amount of my time on this strategy right now.
I had to do some digging to find this gem. When I looked up their 2015 feasibility study, the independent authors didn’t even include $1500 Gold in their projections. Nobody thought Gold would get that high.
At $1200/oz Gold, the IRR of the mine was forecast at 43% and payback was just 2.5 years – very profitable even then. But by the time this mine gets into production in 2021, I expect the Gold price to be high enough it pays back much, much sooner than that.
The feasibility study shows that the Net Present Value (NPV) of the project is 6 times higher at $1,400 per ounce than it is at $900 per ounce; that’s huge leverage for investors.
Can you imagine what it would look like at $1800 per ounce? How about $3,000 per ounce. You get my point.
If you plan everything for strong profits at $900 per ounce – and what you actually get is $1,500 per ounce – you make a ton of money.
I did the deep digging into the feasibility study, but from the cheap price of the stock, I can tell you that the stock market doesn’t know anything about this… yet.
It’s trading for pennies, and it will churn out tens of millions of cash flow – within two years. I think there is BIG money here.
But I had to sift through a couple other factors to settle on this Gold stock. It had to have a proven team that can raise money – check. This team has put two mines into production – one in this same gold camp.
And the company has to have steady news through the mine-building process to keep investors interested – check.
That’s really important – so let me explain.
As I said, it’s already 2 million ounces, but I expect the resource to increase greatly in the near term.
After 25 years investing in gold, I’ve noticed that only 2 things – other than the obvious price of Gold – make gold stocks go up:
- Discovering more ounces in the ground
- Increasing Gold production
This company in which I just bought 450,000 shares will be doing a lot of BOTH in the next two years. But the issue is – the Gold production won’t get priced in for another few quarters.
But as a multi-million-dollar drill campaign will soon be underway. I’m expecting the drills to take this resource from 2 million ounces to hopefully 3, 4, 5 million ounces plus in the coming 3-12 months – and it’s in a major Gold camp with many multi-million ounce deposits all around it.
This is the positive new from which I expect the stock to respond very quickly – while the mine is getting built.
Good drill results make stocks go up. Great drill results, in a Gold bull market, make stocks SOAR.
And let me be clear folks, we are in a Gold Bull Market.
Much smarter people than me believe that we are at a historical gold buying opportunity. Investors need to be long gold now.
Ray Dalio… the head of the most successful hedge fund in history just told investors that they need to be buying gold now.
A year from now everyone is going to see what a no-brainer it was to be getting exposure to gold right now.
The signs are sitting in plain view – and the signs are not subtle.
There are now $17 trillion worth of Government bonds that have negative interest rates.
Yes… this really is trillions of dollars being invested in something that is guaranteed to lose money!!!
Widespread negative interest rates aren’t kind of weird… they are a massive warning sign.
It is also is a screaming buy signal for gold.
Central Bankers across the world are in a race to the bottom.
Sitting on balance sheets with massive amounts of debt they keep pushing interest rates down, down, down….
Every country is simultaneously trying to devalue their currencies, as their government balance sheets are overloaded with debt.
People are finally starting to worry about the value of paper money – and they should!
The Central Bankers themselves know what is coming.
They know what they have created.
Central Banks have been buying gold in record amounts – the most in 50 years.
With gold representing only 3% of its massive holding of foreign reserves China specifically is desperately accumulating gold – as is Russia, Turkey and others.
So far the price of gold has jumped a couple of hundred bucks… this is just the start.
There is no doubt in my mind – now is the time to get exposure to Gold….
The leverage to Gold comes from owning the junior miners.
If Gold goes up 10 percent the junior mining stocks go up 10 times that.
Despite the sharp increase in gold prices that we have just experienced… money hasn’t even started flowing into the junior gold mining sector.
The VanEck Junior Gold Miner ETF currently trades at $42.36. That is just 25% of where it traded in 2011.
The entire sector could quadruple… the smallest junior miners can go up 10 and 20 times.
When these stocks eventually really pop it is going to be a moonshot.
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Tomorrow I’m going to tell you everything that you need to know.
1 – Full details on the specifics of this low cost open pit mine
2 – The homerun project that this management group developed in this exact same gold belt, plus their other big winners
3 – How much resource upside we can reasonably expect in the coming weeks to months
4 – And of course the name and ticker for this no-brainer stock
This Gold Stock is so cheap – literally, investors can buy it for pennies a share – and in two years it will giving investors tens of millions in cash flow.
When I read the feasibility study that laid out the economics of this project I thought – these numbers will be laughable a year from now.
First – the price of gold isn’t $900 per ounce, it is $1,500 per ounce. Actually, it’s $1500 now and rising still.
What once was a looking like a solidly profitable mine has now become a grand slam homerun.
Second – this study represents the gold resource from less than 10 percent of this property. I expect the true resource upside is likely to be multiples of this.
After a decade of disappointment investors – across the world – are massively underweight the mining sector.
High quality assets are trading for pennies – and there is no bigger bargain than the symbol I’m going to share with you tomorrow.