Stock Market Investment Ideas

These Three Low-Cost Gold Miners Are A “Buy”…





Daily Resource Hunter

The Daily Resource Hunter
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Daily Resource Hunter Thursday March 8, 2012
rule
Muddy Boot These Three Low-Cost Gold Miners
Are A “Buy”…
Look Past The Gold Price Hiccups To This Opportunity
   
Matt Insley
Matt Insley

Dear Resource Hunter,

Had you seen this headline from the Financial Times while sipping your morning coffee your eyes would have glazed over…

“China moves to globalize currency” the headline reads.

China, blah. Globalize, blah. Currency, blah.

Today I want to show you why this headline is another hidden piece to the decade’s biggest gold story. It’s an important story that could mean huge profits for in-the-know investors, so let’s get started…

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“China intends to extend renminbi loans to other Brics nations, in another step towards the internationalization of its currency” the FT article tells us.

You may remember the last time we covered a nugget like this. Back in September China made a similar currency-related announcement noting their intention to have the renminbi fully convertible by 2015.

Today’s announcement is just as important. According to the FT article, “Under the agreement [China Development Bank], which lends mainly in dollars overseas, will make renminbi loans available, while the other Brics nations’ development banks will also extend loans denominated in their respective currencies.”

Anyone can see China has its eyes set on becoming a world reserve currency.

But with a closer look behind the curtain, the only serious way for China to accomplish this goal is to be stockpiling gold.

Don’t say we didn’t warn you either. Between now and 2015 a shockwave will be sent through the global currency system — it has the potential to change the global economy, dethrone the U.S dollar and most importantly, send gold prices soaring.

For you, as a holder of U.S. dollars, it’s important to know the potential ramifications of China’s strategy. For starters it could mean those dollars in your pocket (and bank account) will be worth a lot less come 2015.

Whether China muscles its way into a reserve currency position or if their announcement simply stirs the global currency pot, you’ll want to be prepared.

That means you’ll want to have access to our favorite stable currency, gold.

Frankly, with writing on the wall like this, I’m surprised anyone pays attention to the daily price swings in the price per ounce. To be honest, I surely don’t. Instead we should look at the bigger picture. The need for a stable currency will create more global demand for gold.

And without waiting till 2015, I have a way for you to play it…

As you know, the price of gold has outpaced the share price of gold miners — something we’ve been covering here for many months.

Indeed, it’s still only a matter of time before the mining sector plays a grand game of catch-up.

Back when we first covered this story I told you about three large low-cost miners, Barrick Gold (ABX: NYSE), GoldCorp (GG: NYSE), Newmont Mining (NEM: NYSE). Today I’d consider all three of these “Big Gold” companies a buy.

Here’s a look at what they’ve done since we first broke this story…

As you can see, since the middle of 2011 the price of these miners hasn’t done much — all three pretty much at breakeven over that period. That means today you have the same opportunity that we saw back in 2011!

And when you take a look behind the scenes, it’s still only a matter of time till these gold miners head higher. How am I so sure? Take a look at this updated table…

Last year these miners pulled gold out of the ground at an average cost of $528/oz.
With an average sale price over $1,500 these companies are looking at 184% return on investment. That means for every $1 of cost, these guys put $2.84 in the bank. Show me any other industry that can boast such bankable returns and I’ll show you a winner.

That’s why instead of worrying about the day to day price fluctuations in gold I urge you to look at the big picture for gold going forward.

With the China end-game slated for 2015 it’s only a matter of time before gold becomes a hot commodity the world over. When that happens the price per ounce will rise and the miners that I listed above will do even better.

Keep your boots muddy,

Matt Insley

P.S. The companies I listed above are only the tip of the iceberg. In fact, along with those mainstream names there are plenty of other high-profit opportunities out there. If you’d like full coverage on the markets best picks — including the three I named above, other high-profit potential companies, and specific buy and sell information from our in-house expert Byron King — I urge you to check out our latest report, by clicking here.

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It’s clear to see China has its eyes set on becoming a world reserve currency. And with a closer look behind the curtain, the only serious way for China to accomplish this goal is to be stockpiling gold. Over the next three years the price of gold should enjoy a massive run-up. The best way to play the trend is with highly-undervalued miners. Click here for our favorites.

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Resource News
Rare Earth Stocks Surge in 2012
Since the start of the year rare earth stocks have risen 15%, msnbc reports. Although North American RE stocks took a hit last week as it was announced that China may double rare earth exports this year to take advantage of recent price rises. As American manufacturing prepares to take off, these rare earths will be providing essential raw materials. Look for more rises in price as production struggles to keep up with demand.

Canadian Oil Sands Companies
to Share Technology

Twelve of the largest oil sands producers in Canada have agreed to jointly fund environmental research and share the intellectual property rights for the new environmental technologies developed, Rigzone reports. As we see more progress being made for the development of the world’s third largest oil reserve, the eventual U.S. approval of the Keystone XL Pipeline becomes that much more clear.

Spot Prices
GOLD SILVER OIL
$1,695.89 $33.62 $106.87
US Dollar CRB INDEX S&P 500
79.22 315.67 1,364.37
-0.63% +0.40%  
     

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