Plus: GALIANO GOLD | ATAC RESOURCES | IVANHOE MINES
“WHAT WOULD happen if Warren and Charlie said on Saturday that they think precious metals are a good investment?”
I dislike conditionals. In this case (Berkshire Hathaway annual meeting Saturday in Omaha competes with Kentucky Derby in Louisville), Warren Buffett & Charlie Munger’s last semi-nod to gold came in 2011. “What motivates most gold purchasers is their belief that the ranks of the fearful will grow,” he said in the annual Berkshire Hathaway BRK.A letter.
That is simplistic. I own actual gold (have since 1999) because it deserves a place in the legacy I will leave for (fill-in-the-blank). Plus, I dislike cheaper-and-cheaper paper (currencies, bonds, many stocks) as much as I dislike conditionals.
Oh, and the reciprocal gold construct:
‘When financial asset returns are zero or close to zero, the return on (the physical asset) gold is 20 percent on average yearly. Compound that.’ — Sun Valley Gold fund’s Peter Palmedo
Reciprocal gold (traditional investments slide; gold gains) — please see The Calandra Report/TCR report(s) on that. Also please see: 30 Years Making Case For Patient Gold
ATAC Resources ATC ATADF: The other day, someone dropped 4.5 million shares of ATAC … as the Yukon/B.C. explorer awaits consummation of its Hecla Gold transaction. (I mistakenly had Kinross Gold as ATAC’s buyer in that report). I asked Graham Downs, ATAC’s chief exec, about the outsized trade, which shaved 7%. or so from the stock.
“I saw a big cross of 4.5 million shares but it was to and from the same broker. Lots of arbs in the stock right now,” Graham said. I own it — fortunately when Victoria Gold made the first offer for ATAC several months ago.
Galiano Gold: this is the Ghana gold miner GAU, cash-flowing and (I believe) set to lower mining costs and see boosted net income this year. Q1 report shows cash and cash equivalents of $56.2 million … and debt free. I got into the shares after CEO Matt Badylak‘s concise show-and-tell in Zürich 3 1/2 weeks ago.
Formerly Asanko and Keegan Resources, Galiano Gold, in a joint venture with Gold Fields of South Africa, looks on track for mining 100,000 to 120,000 ounces (break-even on income projected at $1,700 gold price) this year at its Asanko Gold Mine, and possibly double that in coming years across four pits. That is the JV total.
The inflection that investors probably will see this year, before tailings retrieval shifts to hard-rock mining in the autumn of 2023, is pegged to the all-in cost number that “scares” investors right now.
That $1,900 cost number has $150 an oz in non-cash costs (from the stockpile processing), and that expense is one off for 2023; plus another $250 an oz in the AISC number for tailings dam expansion — another one-time cost.
If Galiano starts guiding (this year, next year?) below $1,650 an ounce all-in cost, the stock will set fresh highs, I believe.
Ivanhoe Mines: IVN IVPAF today (Friday May 5, 2023) is benefiting from what I see as a solid quarterly earnings report just out. Also, a stabilizing copper price; a recovering platinum price; and an action plan, long in the works, for its Kamoa Kakula-sister Kipushi Mine (copper, zinc).
Helping: recession talk easing, thus boosting IVN IVPAF shares, which look poised to set all-time highs, It is our largest nat-resources stake here at home — approximately 75,000 shares, l-o-o-o-n-g held.
Ping me for questions about DHT Holdings (the double-hull tanker-co in Europe); Ridgeline Minerals; Radisson Mines.
— Thom Calandra
Thom Calandra is a writer and an investor. Research and material are meant as editorial opinion. He is not a professional investment adviser. Please do not consider his reporting as a recommendation to buy or sell securities.