Some gold and gold stock takeaways from Nigel Somerville...

MAJOR EXPOSE: IQE – more on Dr Drew Nelson’s EFH margin call(s): do you feel lucky, punk? From the Deputy Sheriff of AIM HERE

The online extravaganza of the one-off ShareProphets Shares Conference was sensational - all the videos are now up for a la carte selection if you are yet to view - with much to make me sit up and think. And that brings me to the yellow metal. It was a consistent theme: the money printing machines go “Brrrrrr….” debasing fiat currencies, and as night follows day, gold will go up. Whether or not you believe the Central banks will pull off the application of another round of Modern Monetary Theory without triggering Zimbabwe-style hyperinflation or whether we will just see the gap between rich and poor widen again as the haves borrow at near interest-free cost to invest in the markets whilst the have-nots toil to meet incredibly expensive credit card bills, almost everyone saw gold going higher. Of course, there is going higher a bit – perhaps to $2000 or $2500 and going to the moon. Bank of America hit the headlines the other day forecasting $3000 in the next 18 months. Jordan Roy-Byrne (our favourite technical analyst) recently suggested $30,000 – but over the next twenty years. Peter Hambro showed us that gold has risen by 48-fold over the last 57 years. If that is repeated, gold will be over $80,000 in another 57 years. Who is right? Well, from where we are now, if gold is going up then it is surely worth putting on your shopping list as an investor so in that sense it doesn’t matter.

Tern – the sudden change of auditors. Compelling evidence that it was not planned from The Sheriff of AIM HERE

But if gold continues to perform as it has in the last 57 years - and history suggests it will still be seen as a store of value in times - then it offers inflation protection. And if we reach the point of financial Armageddon then its protection as a store of value will surely be vital – even if you can't spend a brick of gold down at your local Tesco! That was Peter Hambro’s point. It was not to buy gold miners or clever EFTs with just paper or derivative backing: you want physical. Richard Poulden also suggested holding physical gold, warning off ETFs which are not backed by physical. He pointed to my article suggesting that the gold price could see a repeat in reverse of what happened to oil recently. I can’t take any real credit for it, as I was picking up on a point raised by Peter Schiff, but just as there was so much oil arriving and there is nowhere to store it, as the May futures ran down the clock to expiry oil longs were suddenly realising they had a loan of oil coming and nowhere to put it. The chaotic result was those oil futures turned negative: traders were paying people to take the oil away! With gold, there is potential for a perfect storm the other way around as short positions in the US are faced with having to deliver gold which simply is not available. There are no flights to the US and there seems to be an incredible shortage of physical. Worse still, for every real physical ounce of gold there are multiple ounces of “paper” gold. Expiry of the June futures contract is going to be very interesting! Richard and Tom also discussed the fact that nobody in the mainstream media (eg the Daily Mail) or financial press are really discussing gold. As I pointed out, Hargreaves Lansdown pointed its readers to funds other than gold – yet apart from Coronavirus bubble stocks, gold is about the only thing going up. Perhaps, they wondered, when it does hit the headlines that will be the time to sell!

The latest on continually stuttering rich man's plaything, Aston Martin Lagonda from Chris Bailey HERE

Well, if there is an inverse bloodbath as June futures expire, I bet it will make the headlines – and at least temporarily that may well be a good time to bank profits. But my general take is that if history is to be believed, we should see a gold bull market for a good couple of years from here. It remains to be seen how hard the Federal Reserve will run its printing presses, and how long for, but my guess it will be for longer and harder that the market seems to be pricing in. Perhaps that explains the magnitude of the market recovery too. I had a couple of interesting exchanges over Turkish gold producer Ariana (AAU) – firstly with head honcho Kerim Sener, and later on with an investor. I probed Kerim on what happens next: if the proposed corporate deal goes through and Ariana ends up with $30 million of cash burning a hole in its pocket, however hard I try I cannot see Ariana spending that cash on what we know about. After all, if the deal goes through, the Red Rabbit project will be self-financing, probably with new bank loans to cover major capital expenditure and Salinbas would be a free carry for the time being. So it seems that Kerim has something up his sleeve – something he did not deny, although we will have to wait and see what he has in mind. As to my chat with an investor, I am accused of being too conservative with my price targets. I completely get the criticism: for starters, if the proposed corporate action goes through the implied valuation of Ariana would be up over 4p and with major expansions in production lined up that valuation will surely head higher – not to mention if gold carries on rising in price. I admit it: I am being conservative! But I prefer to value what is actually there right now, not what might happen. So my 3.5p to top slice if you want to advice still stands – at least until we learn more. And whilst I would suggest a top-slice, I am thinking a small amount – not half or all of my shares.

Read HERE: KEFI Minerals – on the discounted placing...

But there is another problem, because my personal holding has increased hugely in size as the share price of Ariana has risen from a low point of near 1p to the current 3.45p. At one point it was about half the value of my SIPP and that is simply too big for me. So as each top-slice mark comes around I have been trying (not always successfully) to trim my over-sized exposure – even though I still completely buy the Ariana investment case. As for where we could be in, say, 2 years, Ariana could be sitting on 23.5% (following the corporate action seeing completion) of around 50,000 oz of gold production and Salibas could be heading for a mine to produce a further 50,000 oz. With historical production costs of around $500 per ounce and with the gold price having headed through perhaps $2000 or $2500 that is a lot of cash flow. Regular dividends could be on the menu by then, Ariana could easily have coughed up a special dividend on the back of the corporate deal and some interesting new assets in or around Turkey could have come to the fore. Oh, and the Cyprus project should have shown some decent drilling results too. What would that lot be worth in a raging gold bull market with the bulletin boards going crazy? 10p? 20p? More? But that is all for the future and I stand by my rather boring advice for now. Let’s not price in the upside until it actually happens!

Reviewed HERE: PHSC – adjusted EBITDA up… why the share price materially down?...

In the meantime I have been buying a bit more Centamin (CEY), the GDX ETF (of gold majors), GDXJ (supposedly gold juniors, but only in the sense that they would not top the FTSE100) and I am still riding my luck with Bluebird Merchant Ventures (BMV), having top-sliced, and the perhaps more dodgy triple-leveraged Wisdom Tree ETF. I can’t recommend that, but I will report back when it either roofs it or I call it a day with my tail between my legs. I have also taken a small position in Vista Gold (traded on AMEX and in Canada under the code VGZ) as a speculation on it getting funding….fingers crossed there! My formal recommendations from that lot are just Ariana and Centamin, but some of the others could be worth a look at. If the futures market feels the strain as June futures close out, I shall be selling a fair chunk of the others though and waiting for a new day. Remember things can go wrong. My expectation though is to be able to ride the gold bull for a good while yet, and then, as things start to settle down, I will want to cut my exposure and move some cash back into more normal equities.

Read HERE: OptiBiotix – now Taiwan agreement adds to confidence...

Filed under: gold, IQE, Drew Nelson margin call, Tern, Aston Martin, KEFI Minerals, PHSC, OptiBiotix

Burberry & ASOS - fashionista trading update face-off


Fevertree - a Trading Statement lacking financial specifics… & a recovered £2.7 billion valuation


Centamin - Q2 report, well ahead on this tip but still a buy considers Nigel Somerville...


Red Rock Resources - spin-off potential, and more than one...


KEFI Minerals - about to rip? The HotStockRockets team writes...


Gold cracks $1800 - what to do now and is it Ouzo time yet?...


Whitbread - why you should not worry about a -80% Q1 revenue move writes Chris Bailey...


It has been a torrid time for pubs but Marstons should recover strongly reckons Gary Newman


Highland Gold Mining - update on COVID-19 response, continuing as planned...


DS Smith - respectfully Mr Market you are wrong says Chris Bailey...


Pity us poor British taxpayers bailing out Versarien plc says Tom Winnifrith...


Petra Diamonds - heading for a wipeout for equity holders? Gary Newman writes...


easyJet - data breach is not in my top three worries and I own the shares says Chris Bailey...


San Leon Energy - 2019 results & now about to capitalise on a strong position?


KEFI Minerals - reduced Tulu Kapi project funding requirement, buy says HotStockRockets


UK Oil & Gas - do not get spiked & is that a dodgy deal I smell? writes Peter Brailey...


Cranswick - future FTSE-100 constituent? Chris Bailey reviews...


Why Amigo Holdings is a zero considers Tom Winnifrith...


BP - new CEO sounding loony... or being very clever?


Novacyt - corona update, this is all about executive greed and share ramping now says Tom Winnifrith


Kingfisher sings a song of recovery... but can do so much more says Chris Bailey


Two UK shares which cannot defy gravity forever says Tom Winnifrith


Metro Bank - potential acquisition two drunks propping each other up?...


Cora Gold - a buy suggests HotStockRockets


Hummingbird Resources - a diversified gold production buy?...


Nearly a 10 bagger tip... but evidence of alternative energy bubble?


Avacta - its covid game soon to be up says Tom Winnifrith...


Columbus Energy - another potential share price catalyst...


Biffa - still brass in muck says Chris Bailey...


Union Jack Oil - for a hat-trick of wins?...


Volvere - 2019 results... & 2020 opportunities...


Hochschild and Hertz... A review of two old timers by Lucian Miers


Big themes still at Playtech says Chris Bailey...


Centamin, Ariana Resouces & Gold - was that the correction, in double-quick time?


Asiamet - negotiations for deal on KSK helps shares, target increased...


Bluebird Merchant Ventures - further project funding progress, increased price target...


Burberry shares remain fashionable to me says Chris Bailey


Imperial Brands - still an Income buy?


Columbus Energy - project & funding update suggest still a buy?


Marks & Spencer - never the same again? Chris Bailey reviews...


OptiBiotix - sales trajectory sparks shares, but still an even stronger buy?...


A whole sector that is a short?...


Tri-Star Resources - sale of first Antimony BUT...


KEFI Minerals - still significant upside offered by its asset base...


OptiBiotix - now Taiwan agreement adds to confidence...


Some gold and gold stock takeaways from Nigel Somerville...


Is Trainline ever going to make sensible profits?


Another reality pill - this time for BT Group


Jadestone Energy has the strength to ride out low oil prices says Gary Newman...


Hummingbird Resources - a buy says HotStockRockets...


Goldplat - quarterly update, production getting back on track...


The markets & sell NASDAQ-listed Credit Acceptance Corporation. From Lucian Miers...


Columbus Energy - shares bounce on Saffron well oil discoveries but remain a buy...


Read and learn from the latest Next plc update says Chris Bailey...


IG Group - why the shares are worth considering writes Malcolm Stacey...


Ariana Resources - a cue to bank massive profits on this share tip? Nigel Somerville reviews...


FirstGroup - activism and the coronavirus. Chris Bailey writes...


Highland Gold Mining - shares bounce on quarterly operational update, but more to come...


Bluebird Merchant Ventures - we tipped at 2.5p now 4.3p to sell, but worth 6p+. Buy...


Will the Oil price rout be repeated (in reverse) in Gold? Nigel Somerville reviews...


The man who predicted negative oil prices reviews where to next...


PZ Cussons - keep washing your hands... and be on board this stock? Chris Bailey writes


OptiBiotix - placing somewhat annoying... but it is for a VERY good reason says Tom Winnifrith


Imperial Brands - an income buy


Sterling Energy a buy? Gary Newman writes...


Ariana Resources - what after a stonking gain in less than four weeks?...


Volvere - shares up on Feb tip after trading update, more to come say Tom Winnifrith & Steve Moore


Chris Bailey updates on Rolls-Royce & GVC Holdings...


It is also Sage to look at shares that are not romping says Chris Bailey...


Versarien forced to start to come clean - a stink regulators MUST investigate says Tom Winnifrith...


At a time when dividends are being scrapped, Legal & General stands out says Gary Newman


UK Oil & Gas - another 50 percent share price fall the best case scenario? Peter Brailey reviews...


The big banks know what side their bread is buttered. Chris Bailey writes...


Two stocks which look slam dunk zeros considers Tom Winnifrith...


Premier Foods - a buy despite its high level of debt? Gary Newman reviews...


Bluebird Merchant Ventures - an Agreement supporting a positive view? A review from HotStockRockets


Rockrose Energy - a week is a long time says Peter Brailey...


Cineworld - a good shorting opportunity? Gary Newman reviews...


Silver is my metal of choice at the moment says Gary Newman


Golden Prospect Precious Metals - a gold buy


Hurricane Energy - valuation is far too high. I am short says Peter Brailey...


Altyn - mining equipment purchases, gold production increasing...


Versarien - when & at what price the attempted bailout fundraise?


The company playbook on Covid-19...


Doing nothing looks a great move... with a few possible exceptions says Nigel Somerville


As an investor, doing nothing is generally under-rated... but sometimes the facts have changed...


Bowleven - another AIM oil & gas play crunched by the market sell-off, is it a buy?...


A review of my favourite two gold stocks by Nigel Somerville


GVC & Aviva - catching up on some boring but worthy updates (& the continuing Amigo shambles)...


Volvere - a buy suggest Tom Winnifrith & Steve Moore


Finablr - the car-crash continues at Red Flag Central. Sell says Nigel Somerville


Aggreko, Ibstock, Ashtead & Robert Walters update - any value amongst them?


Hurricane Energy - more risks? Peter Brailey reviews...


Investment thoughts as fear has racked up in recent days - from Chris Bailey...


Ariana Resources - bank gains? A review from the HotStockRockets team...


Goldplat - interims emphasise return to profit & reasons for further encouragement


Gold set to remain strong & Highland Gold Mining a favourite producer considers Gary Newman


Petra Diamonds - now a sell? Gary Newman reviews...


B.P. Marsh and Partners - a buy say Tom Winnifrith & Steve Moore


OptiBiotix - now a US and Canada LPLDL distributor agreement...


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