Are The Miners Starting a Reversal?

It looks like the gold and silver mining stocks (especially the juniors) could be reversing the downward trend they've been in for a while now. While gold has remained under $1600, the stocks have gone up a little bit, with the HUI back up to near 420 and the GDX at 43. 

Perhaps people are starting to realize just how ridiculously undervalued this sector has become. These companies are profitable with $1600, $1500, $1400, even $1200 gold.

http://finance.yahoo.com/blogs/breakout/gold-hits-2012-low-gold-miners-show-signs-132751621.html

Primero Mining Posts Solid 1Q

How this stock is still under $3 a share is beyond me.

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First Quarter Highlights:

--  Improved Earnings and Cash Flow: Adjusted 

    net earnings of $18.8 million ($0.21 per share) 

    were improved from $1.6 million ($0.02 per share) in
    2011 and operating cash flow before working capital 

    changes increased to $21.3 million ($0.24 per share) 

    from outflows of $1.2 million (-$0.01 per share) in 2011; 

    prices to commence in May.

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Cash Position Continues to Grow


 The Company's cash position increased to $86.3 million 

 at March 31, 2012(after paying the initial $9.4 million

 principal and interest payment on the promissory note held 

 by a subsidiary of Goldcorp Inc. in January) from the December 31, 

 2011 balance of $80.8 million. The Company continues to invest in organic 

 growth while building on its balance sheet strength 

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Expecting big things from Joe Conway (formerly CEO of IAMGOLD) and Primero. 

I am long Primero(Quote - PPP). 

Primero Mining Posts Solid 4Q

Primero Mining posted a pretty good 4q and full year 2011 results today:

"The Company reported 2011 net earnings of $67.8 million ($0.77 per share) with adjusted net earnings of $28.3 million ($0.32 per share). Operating cash flows(3) were $80.2 million ($0.91 per share)."

For the 4Q: "The Company earned net income of $36.8 million ($0.42 per share) in the fourth quarter of 2011, compared with net income of $6.9 million ($0.08 per share) in the fourth quarter of 2010 due mainly to the impact of the APA filing and the resultant recovery of income taxes retroactive to the date of acquisition of the San Dimas Mine." I do expect this filing to be ruled in favor of Primero at the end of this year. 

A production decision to expand the San Dimas mine will be made in the 3Q. Primero currently trades at only $2.50 with a market cap just over $200 million. They are expecting upwards of $90 million in free cash flow for 2012 - Can you say undervalued?

I am long PPP.