Unsurprisingly, gold has broken out, reaching a new 'record' high of $1230/oz. More promising is the fact that it closed at its high, a strong indicator that it will go higher. We might reasonably expect a rally to around $1500/oz. We think A1 Minerals (AAM.ASX) - a new gold producer - is the best exposure to this sector because it has just secured funding for a plant expansion.
Their management does not much have my confidence - but you don't buy a car because its pretty, you but it because its cheap and gets you from A to B. And you don't care if you crash it. :)
Andrew Sheldon www.sheldonthinks.com
2 comments:
Hi, just wondering if you could elaborate on your comments regarding the funding for expansion of the plant.
I have no insight other than news that the capital raising was to fund plant expansion. I suspect the expansion is being deferred until Resource Rent Tax is dropped.
This stock is proving a disappointment. It always has under-performed. Stretching my enthusiasm no end....even with a stronger gold price.
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