Letter to the editor: Gold stocks ‘precipitously cheap’

I read with interest Peter Besler’s article on making money on junior resource stocks (T.N.M., March 25–31/13). But I do not think his methodology applies at the present time.

We are living in a once-in-a-generation time of precipitously cheap evaluation of gold resource stocks. Who would think you could actually buy junior mining stocks that are actually making money for pennies on the dollar? For example: Claude Resources, Wesdome Gold Mines or even a potential mid-tier producer like Kirkland Lake Gold for less than $3.50. And then there is one of the richest finds in Canada, Pretium Resources, for less than $8.

I prefer Canadian juniors where geopolitical risks are less, although Quebec is beginning to act like a South American country.
When gold goes to US$2,000 per oz. — or if Rob McEwen is right, US$5,000 — the Barricks and Goldcorps will triple, but the little guys will quintuple or more. On the other hand, Goldman Sachs is looking for US$1,250 per oz. gold (this is the investment house that went belly up five years ago, only to be rescued by the Federal Reserve).

But worldwide monetary expansion is waiting for an accident to happen.

I sleep very well at night with my stable of juniors.

Donald M. Werner, M.D.
Binghamton, NY