Gold Stocks News for Thursday

Lots of news flow today for the juniors.

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"Sandstorm Gold Announces Proposed Share Consolidation  Vancouver, British Columbia, April 5, 2012 -- Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (TSX-V:SSL) is proposing a consolidation of its issued and outstanding common shares ("the Common Shares") on the basis of one (1) post-consolidation Common Share for up to every five (5) pre-consolidation Common Shares (the "Consolidation"), with the final consolidation ratio to be set by the Company's Board of Directors within the range approved by the shareholders."

Fine with me. The company wants to open up to the US markets and bigger investors. The warrants will not be affected negatively.

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"Brigus Gold Hits Q1 Production Target
Halifax, Nova Scotia; April 5, 2012 (NYSE Amex: BRD; TSX: BRD) – Brigus Gold Corp. (“Brigus” or the “Company”) is pleased to announce that it produced 16,922 ounces of gold at an average grade of 3.04 grams per tonne (gpt) in the first quarter of 2012 – hitting the top end of its guidance."

*This is also good for Sandstorm! Great job by the team at Brigus to turn this around. Only expect better things on from here.

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And finally....

Vancouver, April 5, 2012 – Luna Gold Corp. (TSXV-LGC) (LMA-LGC) (OTCQX-LGCUF) (“Luna” or the “Company”) is pleased to announce its gold production update at the Aurizona Gold Mine for the quarter ended March 31, 2012. 

Aurizona Gold Mine produced a quarterly record in Q1 of approximately 16,000 ounces.

Sandstorm owns a 17 percent stream. Luna Gold is an interesting story as well.

Gold Juniors Will Outperform the Next Leg

 Something amazing has happened from October of 2011 until present day - The Dow has actually been outperforming gold (the HUI, the GDX and the GDXJ, as pictured below). Do not expert this divergence to last long. As you see, the juniors (GDXJ) outperformed all from 2010 to 2011, hitting $44 at one point.

The Dow and the S&P (GSPC) started the divergence early December of 2011. It is in my strong opinion that the GDX and GDXJ are in very oversold territory - both are trading near 52 week lows. And it is in my opinion that the Dow is very overbought!

In the long run, it is not even close...gold has been king.

I also believe that, whether it's in 2 months, 6 months, a year, that gold stocks will start outperforming physical, especially the juniors.

From 2005 to 2008, the GLD and HUI traded virtually side by side...the crash of 2008 changed that and GLD has outperformed since then....

I do expect them to meet again, I just do not know when. I will say this - the miners pay dividends and will most certainly be increasing them in the coming years. The miners are all pretty undervalued at the moment as well. Maybe its when people finally realize this, will the gap start to close. Or maybe when they realize the GLD doesn't really have any gold! I do believe the investment mentality on gold stocks will change, it is only a matter of time. Just keep buying at these insane valuations and buy the dips!

I am long GDX and GDXJ. 

Charts courtesy of Yahoo! Finance

Insider Buy Alert - Brigus Gold

Courtesy of CanadianInsider.com:

I am long BRD.