Not a gold bug, but I think having exposure to gold makes sense in this environment for monetary and political reasons. As a sign of personal growth (I hope), I didn’t position myself in a non-producing junior that won’t have leverage to an upside in gold prices.
Though I have Lundin Mining (LUN.TO) and Agnico Eagle (AEM.TO) on my Wishlist (and both do pay dividends), I bought Victoria Gold (VGCX.V) at approx. $6.7 CAD a few weeks ago for the following reasons:
- The chart. Though I’m somewhat of an agnostic when it comes to TA, VGCX has been beaten up (more than most other gold producers) and looked like it was near its support line.
(It has since fallen by 14%, through this support, as gold dropped further to $1835, which I hope is the low.)
- Despite a wildfire in the summer, the company is still hoping to meet its production guidance for the year.
- I can’t find any major reason for why the stock is so beat up, nor any reason to distrust CEO John McConnell. I will likely talk to him in person in January at VRIC or MIF.
- I have a relative in Yukon who works in the natural resource sector; though she’s not an enthusiastic supporter of mining, she has no issues with Victoria Gold as a company and notes that they are continually hiring on the radio (maintaining a skilled workforce is harder in the north).
What CON could be that the AISC (All-In Sustaining Costs) are rising with inflation; the corp. presentation notes it could rise as high as $1550/oz (Release: “Cost Guidance for 2023 remains intact and AISC1 are expected to be between US$1,350 and US$1,550per oz of gold sold.”). This investment is a bet that gold prices are going to move higher, not lower.
Looking for about about 50% gain with this trade.
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