Jim Cramer Actually Gets Something RIGHT!

Jim Cramer of Mad Money, someone who is bullish on gold but has bashed the gold miners relentlessy over the years and praises the GLD, gave HIGH praise to my favorite stock today - Sandstorm Gold (SAND)!

And he's finally got something right.

Some Notes from Cramer: 

Likes gold going forward: "Printing money means more upside for gold..."

Likes Sandstorm - "new spec way to play gold rally. Bullion then GLD(no miners) lists all the problems of miners..." then recommends SAND.

" it's sandstorm gold symbol sand. speculative canadian mine financing business. think of sandstorm as beinging a financer for gold miners. we're in an environment where mierns have a lot of trouble getting financing. lenders aren't lending them money. they need more capital. take advantage of this high gold price. that's where sandstorm comes in they will give a gold miner immediate money up front in exchange for the percentage of the future gold produced.

in essence buying themselves a piece of the production stream. they also make a fixed ongoing payment for the gold they receive ooe down the road. that payment is incredibly low, usually around $500 an ounce. gold is worth about $1700 an ounce. why don't you think of sandstorm being a smaller version of a stock that blew my mind when they came on the show, franco nevada..." From CNBC.com. 

"What if there was a company that gave you the benefits of a higher gold price but none of the headaches?"

Yup, he's a little late to the Sandstorm party here as we're hitting new highs, but I do believe there is still much upside to the SAND price. I've been long since 2010 and have no intention of selling.

Welcome aboard, Cramer!

Watch the video here! - http://video.cnbc.com/gallery/?video=3000118980&play=1

Insider Buying - Buy With the Insiders and Profit!

Please check out this latest article I wrote at InfoBarrel. It explains why I pay so close attention to when insiders of a company are buying or selling. Best of luck investing!

Make Money With Insider Trading

This is a Good Environment for Gold Royalty Companies

This is a great, great time for companies like Sandstorm Gold.  More deals ahead?

 

"RPT-BAY STREET-Royalty firms could spur junior miner deal bonanza

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* Cash-rich royalty companies poised to strike new deals
* Equity market slump puts junior miners in a tough spot
* Developers, juniors, mid-tier miners all vying for funds
By Euan Rocha
TORONTO, June 3 (Reuters) - Royalty companies that raked in cash from strong precious metal prices in the last three years look poised to drive a wave of deal activity in the Canadian mining sector, especially among junior players hungry for financing.

These companies, which fund projects in return for a portion of future revenues, generated huge amounts of cash flow from existing deals as the price of gold and silver soared since the beginning of 2009.

Now, with the recent pullback in precious metal prices and slumping stock markets, they could be the saviors for small and mid-tier miners wh o are eager to grow but strapped for capital.
Europe's debt crisis and slowing Asian growth have tempered banks' appetite for lending. And miners are not keen to issue equity when their share prices are severely depressed, leaving few alternatives to royalty and stream deals for small miners looking to fund project development.

"A lot of the juniors we work with are looking at turning over whatever rock they can in order to get financing. They are exploring it," said Krisztián Tóth, a partner with law firm Fasken Martineau in Toronto.

 Read More: http://www.ibtimes.com/articles/348389/20120604/royalty-firms-spur-junior-miner-deal-bonanza.htm

Agnico CEO Calls for $3,000 gold

Agnico CEO Sean Boyd said today on King World News that he is calling for $3,000 gold in the next 24 months. He's never called for gold to be this high before.

Here's his reasoning: “I think you’re in a situation right now where the problems in Europe are front page and it has hurt the euro. So the US dollar is stronger. If you look at the US dollar, that story is on page 3 or 4. It will be a front page story soon. The debt ceiling has to be raised and we really haven’t fixed a lot of the issues, whether it’s in the US or in Europe.”

This is what I've been saying for quite some time now. The US economy and the US dollar is not front page news - yet. Once people realize how much trouble we are in, I think we will be in for a major rally. This could happen after QE3, this could happen when the debt ceiling needs to be raised, again. They will wait to the last minute to do this...

He is also bullish on the mining stocks, and the juniors, which I think will produce the biggest returns going forward: "When it turns and gold turns, this is where you are going to get the best leverage. You are going to get the best leverage from the quality stocks, and then, ultimately that will move down the chain and you’ll see some huge returns coming out of the juniors at some point.”



GOLD IS GOING TO $5,000 an OUNCE. End of story. 

Read more at King World News.

Is Charlie Munger a Moron?

"Civilized people don't buy gold....I think gold is a great thing to sew onto your garments if you're a Jewish family in Vienna in 1939, but civilized people don't buy gold, they invest in productive businesses."

I just posted a comment to an article at the Motley Fool titled "A Civilized Rebuttal to Charlie Munger" by Christopher Barker. I strongly urge you to read this article and to follow Mr. Barker at the Fool. He has done a great service to the blog community over there and, in my opinion, is one of the best gold analysts out there today.

Here is my remark:

"Civilized people don't buy gold" - So basically China and India is full of uncivilized people. 

"I think gold is a great thing to sew onto your garments if you're a Jewish family in Vienna in 1939..."

Both of these comments are pretty offensive to a lot of people.

Gold is money.... Gold's value is in its rarity and in the effort it takes to get it out of the ground. It takes a lot of manpower, time and money to do this. It's not easy. And to do it profitably is even harder. Just watch that stupid Alaska show on the Discovery channel, although they are clearly gold mining amateurs, it's funny to watch. 

I have a simple question for people to ask: If you had the choice to hold your savings in the US Dollar or in gold coins, which would you choose? It's a simple question. 

I just think this is all common sense and would think people as "smart" as these two would understand the multiple reasons for owning gold. but JRS is probably right on the mark with the "Rothschilds agents" remark."

The fundamental reasons for owning gold are stronger than they have ever been. Gold is money, and will always be. You can't print REAL money. Gold will continue to rise in price (AND IN VALUE which is more important to understand) as long as the currencies continue to fall in value (which they will). It is crucial to understand this. Good luck to all.
Steve

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

Leeb on Gold Juniors - "Greatest Bull Market of All-Time."

Stephen Leeb is Chairman & Chief Investment Officer of Leeb Capital Management:

"The junior gold stocks, the ones with honest to goodness reserves which have not been developed, they will see one of the greatest, if not the greatest bull market of all-time."

Read more at KingWorldNews

Sandstorm Gold Releases Great 1Q Results

Another great quarter for this gold streaming company. I've been in since .65 cents and have no intentions of selling anytime soon!
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Sandstorm Gold Recognizes Record Gold Sales and Operating Cash Flow of US$9.3 Million

 Vancouver, British Columbia, May 3, 2012 - Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (TSX-V:SSL) is pleased to announce its unaudited results for the first quarter ended March 31, 2012 (all figures in U.S. dollars).

First Quarter Highlights

• Record operating cash flow of $9.3 million.
• Record gold sales of 7,946 ounces.
• Average cash cost per ounce¹ of $314 resulting in cash operating margins of $1,380 per ounce.
• Sandstorm entered into a revolving credit agreement to borrow up to $50 million, which remains undrawn.

"The first quarter proved to be another record quarter in terms of gold sales and cash flow," said President & CEO Nolan Watson. "As our cash balance continues to grow, we are better positioned to complete additional gold streams..."

Read more - www.sandstormgold.com

 

Primero Mining Posts Solid 1Q

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

----
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.

----

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 

----

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

I am long Primero(Quote - PPP). 

Newmont Mining Raises Dividend 75 Percent

Proof that gold miners are really profitable even with gold at current "low" levels! 
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"Newmont Mining (NYSE: NEM, Stock Forum), after Tuesday's close, announced that its Board of Directors declared a quarterly dividend of 35 cents per share of common stock, payable on June 28, 2012, to holders of record at the close of business on June 12, 2012.

"The 75% increase in our dividend compared to the second quarter of 2011 demonstrates our commitment to returning capital to shareholders," said Richard O'Brien, Newmont's President and CEO. "Our shareholders continue to benefit from our preeminent gold price-linked dividend policy."

The second quarter 2012 dividend of 35 cents per share was declared in consideration of Newmont's first quarter 2012 average realized gold price of $1,684 an ounce. Under the miner's gold price-linked dividend guideline, each quarterly dividend will be based on Newmont's average realized gold price for the preceding quarter.

At its current share price of $46.37, Newmont's quarterly dividend payout rate would give its stock a yield of about 3% on an annualized basis, presuming the gold price remained at $1,684 throughout the year. At a $2000 gold price, the yield would jump to nearly 6% if the stock stayed in the $46 range.
Despite its dividend increase, shares of Newmont Mining have dropped 18% during the past 52 weeks. The company plans to release its first quarter 2012 results before the market opens on Friday, April 27, 2012." From Stockhouse.com

Huldra Silver - Keep an Eye on this One

Huldra silver is one silver stock that could be in production very soon and is a stock I would keep an eye on for 2012.

From a recent Seeking Alpha article, from author Jordan Roy-Byrne:

"There's one company that we've just begun covering that we really like. We met with management at the Prospectors and Developers Association of Canada (PDAC) conference. It's Huldra Silver Inc. (HUSIF.PK) and is going to be a new high-grade silver producer. It is expecting its final permit in April before it can go into production at its Treasure Mountain property.

 It's very well structured and also tightly held and currently has less than a $45M market cap. Once it gets going, management expects to produce 2 Moz/year. That would be very significant for this new tiny company relative to its market cap. We think there's some good near-term upside with very high leverage to rising silver prices. A move in silver above $40/oz could be a second major catalyst for Huldra Silver. Finally, the cash flow from production will enable the company to invest in developing and expanding the resource at Treasure Mountain while maintaining the share structure."

Share structure

Common Shares Issued & Outstanding	33,689,300
Warrants	9,572,662
Options	2,563,334
Fully Diluted	46,325,485

Huldra is also Chris Marchese's #1 silver stock for 2012. From the Motley Fool blogs: "Huldra Silver - This is a story that been kep under the radar for quite some time but is looking good for at least a 2-3 bagger and perhaps a core holding in ones portfolio."

Finally, according to a Pope and Company Analyst Report, these are the top 3 shareholders of Huldra:
"Management & Board of Directors ~13% Sprott Asset Management    9.6% Coeur D’Alene Mines Corp. (CDE: NYSE) 6.8%"

Very intriguing, indeed! 

I have no position in Huldra, but may initiate a position within the next 72 hours.

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