Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Secret to Finding the Next Goldcorp Gold Stock

Commodities / Gold and Silver Stocks 2015 Mar 31, 2015 - 03:56 AM GMT

By: The_Gold_Report


Chen Lin, author of the popular stock newsletter What Is Chen Buying? What Is Chen Selling?, knows the smart time to look for the next big gold company is when everyone else has left the sector. With China making moves to invest trillions in commodity-hungry infrastructure, Lin is traveling the world looking for the companies with the right projects in the right place making all the right moves. In this interview with The Gold Report, he shares some of the insights from his recent travels and discusses three companies with potential to be the next Goldcorp.

The Gold Report: You've written that the China-led Asian Infrastructure Investment Bank (AIIB) could lead to a boom in commodities. We recently saw that South Korea is joining a number of European countries and signing on, despite U.S. reservations. Do you see this as a threat to U.S. fiscal dominance?

Chen Lin: I think this is a first step for China. The country has a huge reserve, $4 trillion, much more than it needs on the balance sheet to stabilize its currency. The rest is wasted, collecting no interest. China made some huge mistakes in the past through poor acquisition decisions because of faulty lending standards. This is a sign that it has learned from its mistakes and wants to make the most of the trillions it has to loan out right now. The bank will operate close to international standards, and because it has many nations involved already, defaulting loans will include less risk.

This is a test. If it is successful, it can expand to Africa, South America, even Europe and North America. China has trillions of dollars sitting, doing nothing. It wants to find a way to lend money it can almost guarantee to get back and then put the money to use in the form of development. China has a huge infrastructure network capacity, requiring steel and cement. This creates jobs, which is good for the economy. That was the thinking behind the announcement.

If the AIIB is successful, it will be a big boon for base metals, energy, platinum and palladium sectors. It may even boost silver demand and prices because of its industrial use. I don't think it will have too much impact on gold, though.

TGR: Does that include copper? It has been below $3 per pound ($3/lb) all year.

CL: Yes. Copper is integral to electric railroads and power lines, so copper prices could be positively impacted.

I have been watching copper closely for quite some time. Last year I was telling every gold company I invest in to hedge copper when it was over $3/lb. I think China's growth is slowing down. Copper is very much related to Chinese housing. China has a law that every new house has to use new copper for water pipes instead of recycled copper for safety reasons. So all this copper has been going into new buildings in China, many of which are sitting empty. When housing construction slows down, copper demand goes down. I saw that coming for a while. I have not been very bullish on copper and am still not very bullish on copper going forward. This Asian development bank could change that potentially, but we have to watch.

TGR: What commodities are you buying and selling to prepare for the rest of 2015?

CL: Right now, I'm still more focused on energy. If my calculation is right, then 2015 will be the bargain year for energy. For gold, the year to buy may be 2016 or 2017. It may be sooner, but you need to watch closely. Sometimes, the bottom is hard to tell exactly.

TGR: It sounds as if you are watching gold companies very closely. You recently visited a couple of projects. What did you find?

CL: As I told my subscribers last year, I see the bottom of gold coming. So I wish to spend more time investigating which companies will be the next winners. I spent a lot of time visiting gold companies since last year. I recently visited OceanaGold Corp. (OGC:TSX; OGC:ASX), at both its New Zealand operations and its Philippines operations. OceanaGold is one of the lowest-cost gold producers. It is generating a lot of cash. If it wanted, it could pay off all its debt by the end of 2015. But it may do an acquisition instead. Right now, the weak New Zealand dollar and the lower oil price are helping it a lot as well. OceanaGold is one of the acquirers in the industry. It is bargain hunting. Last year, it gave a proposal to Alacer Gold Corp. (ASR:TSX; AQG:ASX), but it was rejected. We'll see what it buys this year.

TGR: What about the resources that OceanaGold has now? Is it still looking to expand the Frasers underground project and the Didipio project?

CL: Yes. In New Zealand, OceanaGold has been mining with a full three-year reserve for 25 years. So it's very likely it will expand its reserve again. Right now, it's set to close by the end of 2017. I talked to management and saw the potential exploration site and it seems pretty open. I think OceanaGold will find new resources and new reserves and then continue to mine after 2017. It is a mining tenement with many targets on the trend; OceanaGold has been mining this way for the past 25 years and I am sure that will continue. In the Philippines, Didipio is the first mine in the region and there are many exciting targets in the area.

TGR: What are some other companies that you visited?

CL: In the Philippines, I also visited B2Gold Corp.'s (BTG:NYSE; BTO:TSX; B2G:NSX)Masbate mine. I visited the project three years ago when it was owned by CGA Mining Ltd. Then B2Gold bought it, and I was a very happy CGA shareholder. It has been well run. B2Gold actually continues investing in the mine, putting in a new mill. The mine is going pretty smoothly. There is also a plan to expand the mine going forward. So I was pleased.

Compared with OceanaGold, B2Gold has been a very aggressive acquirer. It just bought the Otjikoto mine in Namibia, on time and on schedule, which is a very rare thing these days in the gold mining industry. It is also looking at its next mine. It's a mine in Mali, Fekola. I would watch the performance of Otjikoto closely to ensure the company can continue to perform and build out the next mine. Management's plan is to become a 900,000 ounce (900,000 oz) annual producer by 2018.

TGR: Are there other projects that you've been visiting?

CL: Last year, I visited many projects in the Yukon and in British Columbia. One of the very exciting upcoming projects is Pretium Resources Inc.'s (PVG:TSX; PVG:NYSE) Brucejack. It just got provincial approval. It probably will get the final approval very soon. Then we'll see the financing and buildout of the mine. It's a very high-grade, low-cost, exciting story.

TGR: Do you feel that the Yukon government has become more mining friendly recently?

CL: Last year, I met with Yukon Premier Darrell Pasloski. He told me, "Look, Chen, in the Yukon, there are only two industries—tourism and mining." So I say, yes, the Yukon government is trying to work as hard as it can to create jobs, and that will benefit the mining industry.

TGR: Is there one mining story that people will be talking about 5 or 10 years from now because they wish they had seen it coming?

CL: With every recession, every crash, there are always a few winners that come out of it. If companies like OceanaGold or B2Gold play their cards well, they will have the chance to become winners after this downturn.

Investors remember Goldcorp Inc. (G:TSX; GG:NYSE) when it was still run by Rob McEwen in the early days. We want to invest in the next Goldcorp. That is what we have to find.

TGR: You called this the opportunity of a lifetime in the energy investment environment right now. Do you feel the same way about gold or are we at a different stage in the gold price life cycle?

CL: I'm in a wait-and-see mode. Since Goldman Sachs made the statement that gold will reach $1,000/oz by the end of 2016, it has created some buying opportunities for us. So for now, I'm studying companies.

The Chinese government is trying to buy as much gold as it can without impacting the gold price. It probably is very happy with our friend Goldman. Eventually, the tide will turn. The timing of gold's rebound will depend on a lot of factors, which I'm watching carefully. Right now, my best guess is probably 2016–2017.

TGR: Thank you for your time, Chen.

Chen Lin writes the popular stock newsletter What Is Chen Buying? What Is Chen Selling?, published and distributed by Taylor Hard Money Advisors, Inc. While a doctoral candidate in aeronautical engineering at Princeton, Lin found his investment strategies were so profitable that he put his Ph.D. on the back burner. He employs a value-oriented approach and often demonstrates excellent market timing due to his exceptional technical analysis.

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Pretium Resources Inc. Goldcorp is not affiliated with Streetwise Reports. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
3) Chen Lin: I own, or my family owns, shares of the following companies mentioned in this interview: OceanaGold Corp., B2Gold Corp. and Pretium Resources Inc. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

Streetwise - The Gold Report is Copyright © 2014 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

Participating companies provide the logos used in The Gold Report. These logos are trademarks and are the property of the individual companies.

101 Second St., Suite 110
Petaluma, CA 94952

Tel.: (707) 981-8999
Fax: (707) 981-8998

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules