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« Gold Stocks: Oversold? | Main | Kinross Gold Corporation: BUY »
Aug212007 Portfolio Update 21 August 2007

In hindsight it may have been better to sell in May and wait for the summer to drift by. During the early part of May the HUI index was above the 340 levels and now it stands at 312. However in July it jumped to 370 before being caught in the recent global sell off. We are investing for a return over the next few years so the volatility has to be suffered but the upward trend for gold remains intact.

The HUI Chart:

The HUI Chart 21 August 07

We are naturally disappointed to record an erosion of profits but as we have not sold our gold mining stocks then the loss is a paper one and only becomes a real loss or a real profit once we sell. As we are basically long term investors we are not too worried as we expect these stocks to recovery in the months ahead.

Going forward we intend to make the occasional short-term trade and we will be constantly on the look out to accumulate more of what we have and to add new stocks to our portfolio.

If you have any comments regarding our little adventure then please feel free to add them whether you agree with our strategy or not.

Here is a summary of our investments and their progress so far.

Agnico Eagle (AEM) we paid $30.88 and it now stands at $39.51, showing a profit of 27%, which is reasonable considering the recent sell off.

Kinross (KGC) we acquired at $10.08 and this stock now stands at $11.48, a gain of 13.80%. Kinross went through a bit of a pullback so we signalled to our readers to “Add To Holdings” at those discounted levels of around $11.66. We also gave another ‘Kinross Gold BUY’ signal when we purchased more of this stock on the 20th August 2007 for $11.48.

Silverado (SLGLF) we bought at $0.08 and it now stands at $0.07 a loss of 12.5%. The green fuel side of the business is continuing to make progress with the announcement that Silverado has contracted with Pickering, Inc. of Jackson, Mississippi, to provide complete architectural and engineering plans for construction of Silverado’s lignite water fuel (LWF) demonstration facility of their first project, the $29 million coal to oil operating plant.
The Nolan Heights project continues to make good progress where the company has said that a “High grade trend appears to be developing” and we will hold and watch as Gerry Anselmo and his team try to locate the Mother Lode.

Yamana Gold Inc (AUY: NYSE) we paid $9.37 on 27 September 2006, it is now trading at $9.97 for a gain of 6.4%. Yamana had been making good progress but its on/off bid for Meridian Gold has been a drag on the stock. We would like to see this matter resolved before making any further purchases, even though we believe it to be good value.

Canarc Resource Corporation (CCM: TSX) we added Canarc to our list although we are still mere observers. The stock has recently dropped from $0.72 to $0.55 and now to $0.43. We are still monitoring its progress but have no plans to make a purchase as yet.

Staccato Gold Resource Limited (CAT: TSX) this is a speculative buy and we made a purchase on 5th April at $0.62, the stock is very volatile and currently stands at $0.31 having been as low as $0.25.

High River Gold Mines: (HRG: TSX) We bought this at $2.49 and it is now trading at $2.30 for a loss of 7.6%. We still have confidence that High River will go a lot further in the coming months, particularly with their gold mine in Russia coming into production.

We are currently looking researching a number of gold miners which we hope to add to the ‘Buy’ list in the near future however it is not our intention to own hundreds of speculative stock on the chance that they may be the next big one.

We are in position for this next rally but will continue to make adjustments depending upon the performance of each stock.

Good luck with your selections and if you have unearthed real gem our readers would love to know about it.

For those reader who are also interest in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

Yesterday will signalled a BUY on silver predicting a short term move up of $1 in the coming weeks and we also flashed a BUY on Silver Standard, a silver stock that is currently a BUY in our silver portfolio.

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Reader Comments (1)

I love the strategy of playing the mines... But, my fear is always th constant tampering (central banks) with intrinsic value and the often under capitalization of the mines.

While these may be some profitable short term plays... My money is still in acquiring the tangible asset @ 5% - 15% of portfolio to hedge both the risk and inflation.

Sorry about the down ticks - but patience will pay off.

August 26, 2007 | Unregistered Commenter1wealthbuilder

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